Hewlett Packard Enterprise (NYSE: HPE) has confirmed the release date for its Q1 2022 earnings, which will be on Tuesday, March 1, 2022, after market close.
What to look for
Earnings: Stockearning’s Estimated EPS for the fourth quarter is expected to be $0.24 per share. In the most recent quarter, the company topped earnings by posting actual EPS versus predicted EPS of $0.49, representing a YoY increase of 6.12%. In the second quarter, the company had EPS of $0.47, beating estimates of $0.42, representing an 11.9% surprise. Historical EPS Performance shows that in the past 12 quarters, the company has topped estimates 20 times (80%), met twice (8%), and missed twice (8%).
Revenue: The company expects to report revenue of $7.02 billion for the quarter under review. In the last quarter, the company had revenue of $7.4 billion, topping estimates of $7.37 billion. The company is expected to report sales of $28.67 billion for the full year, with estimates ranging between $28.5 billion and $28.86 billion. HPE is expected to have revenue of $29.65 billion for next year.
Stock movement: HPE shares have gained 20.8%% since the company released its Q4 2021 earnings. Interestingly, the company’s shares have been DOWN 13 times out of the past 25 quarters. So, the historical price reaction suggests a 52% probability of the share price going DOWN following the fiscal Q1 2022 earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-4%, while the predicted volatility on the seventh day is +/-6%.
What analysts are saying: Morgan Stanley analyst Meta Marshal assumed coverage in HPE with a Hold rating and raised the price target from $16 to $17. According to the company's Q4 IT Hardware Value-Added Resellers study, supply chain improvements and cloud workload ambitions are on the rise. With the market moving later in the cycle, the poll findings demonstrate her inclination for cyclical growth, which drives her to favour Overweight-rated NetApp (NTAP) and Equal Weight-rated Pure Storage (PSTG), the analysts said. According to Marshall, Value-Added Resellers expect NetApp and Pure Storage to grow faster in 2022 than Nutanix (NTNX) and HP Enterprise.
JPMorgan analyst Samik Chatterjee raised his price target on the stock from $18 to $20 and maintained a Buy rating on the stock. The analyst sees the recent downturn in growth businesses as an opportunity for networking and hardware into the earnings season. In contrast to value firms, which he feels are "set for a major decline in 2022," he sees a repetition of the high 2021 growth in 2022, with upside potential from the supply.
Barclays’ Tim Long upgraded HPE from Hold to Buy and also raised the price target from $16 to $20. According to the analyst, the firm’s primary server and storage markets are stabilizing and transitioning to as-a-service, while networking "should see robust growth." In addition, Long warns investors in a research note that HP Enterprise has the lowest valuation of the group.
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