Hewlett Packard Enterprise (HPE) dropped around 6% in Monday’s premarket, trading at $58.30, as a downgrade from Evercore ISI landed alongside a wider tech selloff.
Hewlett Packard Enterprise Company, HPE
Evercore ISI cut its rating on HPE to In Line from Outperform, keeping its price target at $65. The firm said the downgrade reflects how much the stock has already run up, not a problem with the business itself.
HPE closed at $62.08 on September 11, up 158.5% year-to-date. The S&P 500 has gained just 11.9% over the same period. The stock is also up 37.6% quarter-to-date versus the S&P 500’s 2.1% rise.
Evercore noted that HPE now trades at 13 times fiscal 2027 price-to-earnings, compared to its five-year average of 8 times. The firm said the stock looks fairly valued here, with fewer near-term catalysts to push the multiple higher.
The broader market added pressure. Nasdaq futures dropped 1.65% and S&P 500 futures fell 0.75%, as investors pulled back from AI-linked technology names. The Financial Times reported that safety-related calls to slow AI development have raised questions about future capital spending in the sector.
One of Evercore’s key concerns is the Networking segment. It makes up more than 50% of HPE’s segment earnings before interest and taxes, but margins there have not improved materially despite the Juniper acquisition going better than expected on costs.
Networking orders grew 36% in the July quarter, but pro forma revenue rose just 10% year-over-year. That lags Cisco’s 28% growth and Arista’s 38% growth over the same period.
Evercore did credit management for strong execution in the first year after the Juniper close. HPE stock has gained 192% since that deal closed.
HPE’s fiscal 2026 Q3 results beat estimates, with earnings of $1.11 per share topping Goldman Sachs and FactSet consensus. The company raised its full-year guidance, projecting 34-37% revenue growth and non-GAAP EPS of $3.75 to $3.85, with free cash flow above $3.75 billion.
The analyst picture is mixed. Raymond James has the highest target at $86, following the strong Q3 print. Goldman Sachs holds a Buy with a $75 target. Deutsche Bank lifted its target to $68, citing record AI demand.
On the cautious side, Wells Fargo lowered its target to $54, flagging concerns about revenue conversion and EBIT margins. Piper Sandler sits at Neutral with a $57 target.
HPE’s consensus rating remains Buy, with an average price target of $69.18.
Technically, HPE stays above its 20-day SMA of $54.65, 50-day SMA of $51.11, and 200-day SMA of $34.01. Key support sits near $51.50. Resistance is around $64, just below the 52-week high of $64.25.
HPE carries a Benzinga Edge Momentum score of 98.81, though its Value score of 24.63 and Growth score of 12.21 are notably weaker.
The post Hewlett Packard Enterprise (HPE) Stock Drops 6%. Here’s Why Evercore Hit the Brakes appeared first on CoinCentral.
