Wells Fargo cuts HP Enterprise stock price target on revenue concerns

Wells Fargo has reduced its price target on HP Enterprise stock from $67 to $54, while keeping an Equal Weight rating. The bank expressed concerns over the pace of revenue conversion and EBIT percentage. HP Enterprise's stock has dropped 4.7% in the past week, but is trading close to the firm's Fair Value estimate of $52.08. Despite this, the company reported a 22.6% year-over-year revenue growth, reaching $38.8 billion.

Wells Fargo noted that the company's Intelligent Edge business, which combines high-performance computing and AI, is seeing slower growth than anticipated due to customer inventory clearing. The bank remains optimistic about HP Enterprise's strategic position in this sector, citing potential long-term growth and better margins. Wells Fargo anticipates that HP Enterprise's net income will rise this year, despite short-term hurdles.

Investors can find a detailed analysis in HP Enterprise's Pro Research Report, one of over 1,400 reports available for US equities on the InvestingPro platform. HP Enterprise's recent fiscal third-quarter 2026 results were impressive, with $1.11 earnings per share and $12.2 billion in revenue, beating analyst expectations. The company's revenue grew by 34% compared to the prior year, with non-GAAP EPS surpassing $1 for the first time in a single quarter.

This growth was fueled by stronger-than-expected Cloud & AI revenue and improved EBIT margins. Following these results, Goldman Sachs upgraded its rating to Buy with a $75 price target, while Raymond James raised its target to $86, citing AI server momentum. Deutsche Bank also increased its target to $68, citing record AI demand and $3.1 billion in orders.

HP Enterprise has revised its fiscal 2026 guidance, projecting 34-37% revenue growth and non-GAAP diluted net earnings per share between $3.75 and $3.85. The company also highlighted a backlog of $7.6 billion, with memory availability as the main supply constraint. These factors contribute to a bullish outlook for HP Enterprise, driven by AI advancements and solid financial performance.