Hewlett Packard Enterprise (HPE) faced disappointment from Wall Street analysts as its fiscal 2024 earnings predictions fell short of expectations. This led to a decline in HPE stock, which fell over 4% on Friday.
During an investor day, HPE provided its guidance for fiscal 2024, starting with the quarter ending in January. While the company predicted sales growth in the range of 2% to 4%, slightly above consensus estimates, it fell short in terms of earnings per share (EPS). HPE expects EPS of $1.92, missing the estimated $2.10. The company also projected an operating profit in the range of 3% to 5% and free cash flow of $2 billion at the midpoint.
Analysts from Barclay’s and Raymond James expressed concerns regarding the lower-than-expected EPS and cash flow guidance for fiscal 2024, suggesting that growth initiatives may be taking longer to materialize. However, Simon Leopold from Raymond James noted that the projected revenue growth of 2% to 4% for the next few years is reasonable considering HPE’s previous reputation as a no growth story.
HPE stock fell to $15.63, a decline from its 52-week high of $18.14 in August. In May, HPE sold its stake in Chinese joint venture H3C for $3.5 billion.
David Vogt from UBS acknowledged that while the muted revenue outlook was expected, excluding contributions from H3C and adjusting for one-time items in 2023 was a prudent reset of HPE’s earnings power.
Overall, HPE’s earnings predictions for fiscal 2024 disappointed analysts and resulted in a decline in stock price. However, stakeholders remain cautiously optimistic about the company’s revenue growth projections and its strategic decisions regarding joint ventures and earnings adjustments.
HPE stock currently holds a Relative Strength Rating of 84 out of 99, indicating a strong performance compared to its peers.
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Frequently Asked Questions (FAQs) Related to the Above News
What led to the decline in HPE stock?
HPE's fiscal 2024 earnings predictions falling short of expectations led to a decline in its stock, which fell over 4% on Friday.
What were HPE's predictions for fiscal 2024?
HPE predicted sales growth in the range of 2% to 4%, slightly above consensus estimates. However, they fell short in terms of earnings per share (EPS), expecting $1.92 compared to an estimated $2.10. They also projected an operating profit in the range of 3% to 5% and free cash flow of $2 billion at the midpoint.
How did Wall Street analysts respond to HPE's guidance for fiscal 2024?
Some analysts, including those from Barclay's and Raymond James, expressed concerns about the lower-than-expected EPS and cash flow guidance for fiscal 2024. They suggested that growth initiatives may be taking longer to materialize.
What did Raymond James analyst Simon Leopold say about HPE's revenue growth projection?
Simon Leopold from Raymond James noted that the projected revenue growth of 2% to 4% for the next few years is reasonable considering HPE's previous reputation as a no growth story.
How did HPE stock perform in response to the earnings predictions?
HPE stock fell to $15.63, a decline from its 52-week high of $18.14 in August. The disappointing earnings predictions contributed to this decline.
What strategic decisions did HPE make recently?
In May, HPE sold its stake in the Chinese joint venture H3C for $3.5 billion.
How do stakeholders view HPE's revenue growth projections and strategic decisions?
While some stakeholders may be disappointed with HPE's earnings predictions, others remain cautiously optimistic about the company's revenue growth projections and its strategic decisions regarding joint ventures and earnings adjustments.
What is HPE's current stock performance compared to its peers?
HPE stock currently holds a Relative Strength Rating of 84 out of 99, indicating strong performance compared to its peers.
Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.
