Hewlett Packard Delivers Strong Q2 Results, Raises Fiscal 2021 Outlook

Hewlett Packard Enterprise (HPE) announced better-than-expected fiscal second-quarter results. Hewlett Packard is a multinational enterprise information technology company.

Following the announcement, shares of the company declined 1.5% in Tuesday’s extended trading session.

Revenues of $6.7 billion surpassed the Street’s estimates of $6.62 billion and jumped 11% from the year-ago period driven by healthy demand for its products.

Adjusted earnings came in at $0.46 per share, beating the consensus estimates of $0.42 per share, and soared 70% year-over-year.

Hewlett Packard CEO Antonio Neri said, “We are strengthening our core compute and storage businesses, doubling down in our growth Intelligent Edge and HPC businesses and accelerating our pivot to as-a-service, while also advancing our cloud-first innovation agenda to become the edge-to-cloud platform as-a-service choice for our customers and partners.”

Neri further added, “As businesses emerge from the pandemic and move beyond the immediate needs of COVID, digital transformation is at the forefront of their strategic initiatives. Our focus has been to accelerate our strategy in order to help our customers transform their businesses, optimize their applications and data across an increasingly distributed world, and be future ready, today.” (See Hewlett Packard stock analysis on TipRanks)

For fiscal Q3, the company expects earnings per share to be in the range of $0.38 – $0.44, versus the consensus estimate of $0.43.

For Fiscal 2021, the company has raised its revenue guidance to $1.82 – $1.94 versus the prior guidance of $1.70 to $1.88. The consensus estimate for the same is pegged at $1.84.

On May 11, Stifel Nicolaus analyst Matthew Sheerin initiated coverage of the stock with a Buy rating and a price target of $20 (24.3% upside potential).

Sheerin believes that the risk/reward profile of the company remains compelling at the current levels given an improved outlook for IT infrastructure spending.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 7 Buys, 7 Holds, and 2 Sells. The average analyst price target of $16.56 implies 2.9% upside potential to current levels. Shares have increased 39.7% over the past six months.

Hewlett Packard scores a 5 of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.

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