Wells Fargo reduced its price target for Hewlett Packard Enterprise (HPE) to $54 from $67, citing concerns over revenue conversion pace, underlying EBIT margins, and prolonged normalization in the company’s Intelligent Edge segment amid customer inventory digestion.
The firm maintained an Equal Weight rating on HPE shares, which declined 4.7% over the past week. HPE reported fiscal third-quarter 2026 revenue of $12.2 billion, a 34% year-over-year increase, alongside non-GAAP diluted earnings per share of $1.11. For full-year fiscal 2026, the company guided for revenue growth of 34–37% and non-GAAP diluted EPS in the range of $3.75 to $3.85.
Wells Fargo’s adjustment contrasts with other Wall Street targets: Goldman Sachs holds a $75 target with a Buy rating, while Raymond James and Deutsche Bank set targets at $86 and $68, respectively. InvestingPro’s fair value estimate for HPE stands at $52.08. HPE’s Intelligent Edge business remains a long-term growth driver for the firm, though Wells Fargo noted slower-than-anticipated normalization in growth and margin recovery.
HPE’s recent quarterly performance was bolstered by higher-than-expected Cloud & AI revenue and improved EBIT margins, marking the first instance of non-GAAP EPS exceeding $1 in a single quarter. Deutsche Bank highlighted record AI demand, with orders totaling $3.1 billion, while supply constraints—particularly memory availability—remain a limiting factor. The company’s backlog stood at $7.6 billion.
HPE continues to position itself for opportunities in high-performance computing and AI, leveraging proprietary Slingshot interconnect technology for large-scale deployments. The firm’s strategic outlook emphasizes long-term growth potential in AI-driven infrastructure despite near-term execution challenges.
