Wells Fargo reduced its price target on Hewlett Packard Enterprise (HPE) to $54 from $67 while maintaining an Equal Weight rating, citing concerns over revenue conversion pace and EBIT margin normalization. The adjustment follows a 4.7% weekly decline in HPE shares.
The bank’s move comes as HPE’s Intelligent Edge segment recovery slows amid prolonged customer inventory digestion. Wells Fargo acknowledged HPE’s long-term positioning in high-performance computing and AI convergence, including deployments using its proprietary Slingshot interconnector, but emphasized near-term execution risks.
HPE reported fiscal third-quarter 2026 non-GAAP earnings per share of $1.11, exceeding $1 for the first time in a single quarter, on revenue of $12.2 billion, a 34% year-over-year increase. Analysts had expected revenue of $11.8 billion. The company attributed growth to stronger-than-anticipated Cloud & AI revenue and improved EBIT margins. Order backlog totaled $7.6 billion, with memory availability remaining the primary supply constraint.
Wells Fargo also trimmed its fiscal 2026 revenue growth outlook to a range of 34% to 37%, down from prior expectations, while projecting non-GAAP diluted net income per share of $3.75 to $3.85. InvestingPro’s fair value estimate for HPE stands at $52.08.
Other analysts have taken a more bullish stance. Goldman Sachs reiterated a Buy rating with a $75 price target, while Raymond James raised its target to $86 on AI server momentum. Deutsche Bank lifted its target to $68, highlighting record AI demand and $3.1 billion in AI-related orders.
HPE shares, listed on the New York Stock Exchange under ticker HPE, have faced pressure despite strong quarterly results, underscoring investor skepticism over near-term margin sustainability.
