Hewlett Packard Enterprise Upgraded by Morgan Stanley to "Overweight" with a $28.00 Price Target

Morgan Stanley upgraded Hewlett Packard's (HPE) rating from "Equal-Weight" to "Overweight" and raised the price target from $22 to $28, a 27.27% increase. Analysts have varied perspectives, positioning HPE as a stock of interest. The average one-year price target is $23.29, with an average brokerage recommendation of 2.2, indicating "Outperform" status. The estimated GF Value in one year is $20.66, suggesting a downside of 1.81% from the current price.

Morgan Stanley has upgraded Hewlett Packard Enterprise (HPE) to "overweight" from "equal weight," raising its price target from $22 to $28. This represents a 27.27% increase, reflecting the investment bank's optimism about the company's prospects in the artificial intelligence (AI) and networking sectors [1].

The upgrade comes on the heels of HPE's recent acquisition of Juniper Networks, which is expected to substantially boost the company's presence in the networking sector and increase its exposure to AI technologies [2]. Analysts at Morgan Stanley believe that this acquisition will significantly bolster HPE's business, particularly in the networking segment, which now constitutes nearly half of its operations. The acquisition also enhances HPE's involvement in AI-related hardware and services, positioning it well for the growing demand in these areas.

The positive outlook is supported by several key factors. Morgan Stanley projects an 18% upside to HPE's fiscal year 2026 consensus earnings per share (EPS), with earnings per share projected to grow to $2.70-$3.00 in fiscal year 2027. The firm expects that as the market better understands HPE's increased focus on networking and AI, the company's valuation multiple could expand beyond its current 8x multiple [2].

Upcoming catalysts, such as HPE's third-quarter results scheduled for September 3 and the company's analyst day in October, are expected to drive stock performance in the near term. The analyst day is particularly significant as it will provide longer-term forecasts, helping the market appreciate HPE's future earnings and cash flow potential [2].

The broader tech hardware sector also appears to be in a positive outlook, with Morgan Stanley increasing price targets for other companies in the space, such as Dell Technologies and NetApp. This indicates a generally positive outlook for enterprise technology spending, particularly in AI and networking-related areas [2].

Despite the upgrade, Wall Street remains divided on HPE's stock. While Morgan Stanley and some other analysts maintain a bullish view, with 10 out of 20 analysts giving a strong buy or buy rating, the remaining 10 have a hold rating [2]. The estimated GF Value in one year is $20.66, suggesting a downside of 1.81% from the current price.

References:
[1] https://sherwood.news/markets/hp-enterprise-jumps-on-upgrade-to-buy-from-morgan-stanley/
[2] https://theoutpost.ai/news-story/morgan-stanley-upgrades-hewlett-packard-enterprise-on-ai-and-networking-potential-19381/