Barclays downgrades HPE after 186% rally, cuts price target to $77
Summary
Barclays has downgraded Hewlett Packard Enterprise following a massive surge in the company's stock value. Alongside the rating change, the financial institution also lowered its official price target for the technology firm.
Barclays downgraded Hewlett Packard Enterprise (NYSE: HPE) to Equal Weight from Overweight and cut its price target to $77 from $83, citing valuation after a roughly 186% rally this year. Shares fell about 4% to near $66 in Wednesday morning trading.
Sources: Investing.com
Our Take
This is a valuation call, not a call on the business. Barclays didn't change its earnings estimates; it simply lowered the multiple it is willing to pay, to 13 times fiscal 2028 earnings from 14 times. In other words, the analyst still likes the company, just not at this price after a near-tripling of the stock.
The bull case is intact: the Juniper-driven networking business now makes up about half of operating profit and has real exposure to AI infrastructure. The risk Barclays flags is on the server and storage side, where margins could come under pressure as memory prices normalize.
Even after the cut, the $77 target implies roughly 17% upside from about $66. For traders, downgrades after a run this big often trigger a few sessions of profit-taking. Momentum players may want to wait for the stock to find support before chasing a bounce, while longer-term holders may see this as a pause rather than the end of the trend.
Levels for Wednesday:
- HPE closed Tuesday at $68.81 and was indicated near $66 in pre-market trading after the downgrade.
- Resistance: Tuesday's high at $71.18, then the 52-week high at $73.56.
- Support: Tuesday's low at $67.05 has already given way pre-market, so watch the $65 area next.
The tell: if HPE gets bought back above $67 in the first hour, dip buyers are treating the downgrade as a gift, not a warning.
Opinion of Tech & Money Press. Not financial advice.
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