Hold Rating on Hewlett Packard Enterprise Amid Acquisition Delays and Tariff Challenges

In a report released today, Meta Marshall from Morgan Stanley downgraded Hewlett Packard Enterprise (HPE – Research Report) to a Hold, with a price target of $14.00.

Meta Marshall has given his Hold rating due to a combination of factors impacting Hewlett Packard Enterprise’s near-term outlook. The primary concern is the delay in the Juniper acquisition, which has been postponed due to challenges from the Department of Justice, pushing the expected completion to late summer. This delay means that the anticipated synergies from the acquisition are also on hold, reducing potential positive catalysts for the company.
Additionally, Hewlett Packard Enterprise has lowered its financial expectations for the upcoming fiscal quarters, citing weaker server margins and the impact of newly introduced tariffs. These tariffs are higher than initially expected and pose a significant challenge due to HPE’s thinner margin structure compared to its peers. The combination of these factors, including the uncertainty surrounding the Juniper acquisition and the adverse effects of tariffs, has led Meta Marshall to adopt a more cautious stance, resulting in a Hold rating for the stock.

According to TipRanks, Marshall is a 4-star analyst with an average return of 4.1% and a 51.60% success rate. Marshall covers the Technology sector, focusing on stocks such as Arista Networks, Hewlett Packard Enterprise, and Cisco Systems.