RBC Capital Starts HP Enterprise (HPE) at Sector Perform

RBC Capital initiates coverage on HP Enterprise (NYSE: HPE) with a Sector Perform rating and a price target of $17.00.

Analyst Amit Daryanani commented, "Our thesis is predicated on the following key points: 1) Enterprise Services revenue/margin stabilization is needed for an HPE turnaround; 2) Long-term GDP-like growth (we think these modest growth levels would be an impressive task given the ongoing challenges HPE has within services, software, and hardware assets); 3) Storage and Networking should improve mix and provide growth vectors; 4) A 100–200 bps ES operating margin expansion could drive $0.08–0.16 in incremental EPS; and 5) Capital allocation program with ~50% of free cash flow to shareholders. Given these dynamics, we believe the valuation is fair at this time."

For an analyst ratings summary and ratings history on HP Enterprise click here. For more ratings news on HP Enterprise click here.

Shares of HP Enterprise closed at $14.72 yesterday.

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