Hewlett Packard Enterprise Faces Mixed 2026 Outlook, Morgan Stanley Says

MT Newswires Live03-10

Hewlett Packard Enterprise (HPE) faces a mixed outlook in fiscal 2026 amid strength in core networking and headwinds in cloud and AI margins in H2 from input cost inflation, Morgan Stanley said Tuesday in a report.

Morgan Stanley raised its 2026 EPS estimate to $2.27 from $2.14 following a solid Q1, while taking "a more tepid view" on revenue, modeled mostly in line with guidance. Cloud and AI margins are projected to land at or below the low end of management's forecast range as memory prices continue to rise, the report said.

"In the near-term, we believe margin pressure from a stronger AI server mix coupled with memory cost inflation will limit multiple expansion and positive estimate revisions," the report said. "Networking is the clear outperformer of this business."

Morgan Stanley increased its price target on Hewlett Packard Enterprise stock to $25 from $23 and reiterated its equal-weight rating.

Price: 21.92, Change: +0.11, Percent Change: +0.48

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