Hewlett Packard Enterprise (HPE): Cutting PT - Susquehanna

Susquehanna analyst, Mehdi Hosseini, reiterated his Neutral rating on shares of HP Enterprise (NYSE: HPE) and cut his price target to $17 from $20 after softer Apr Q margins were a surprise. That said, the analyst believes further cost savings potential in the core business can support margin expansion from current trough levels. The analyst believes a Neutral rating is approapriate until he gains confidence in HPE's ability to drive sustained revenue growth in its core business.

The analyst sees see a path to growth in the Server business in FY18, driven by the confluence of emerging products (Hyper-converged, Synergy), and contribution (to some extent) from the Skylake product cycle, however it remains unclear how HPE plans on addressing the continued migration of workloads to the public cloud - particularly given HPE's de-emphasis of Tier 1 cloud business.

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 $18.81 yesterday.

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