HPE Stock Moves Higher: Morgan Stanley Raise on Juniper Deal Upside

Hewlett Packard Enterprise (HPE) is experiencing a notable upswing in premarket trading, fueled by an upgrade from Morgan Stanley. The firm's revised outlook suggests the market is underestimating the potential accretion from HPE's impending acquisition of Juniper Networks.

HPE is trading up 2.95% in the pre-market, a positive reaction to the analyst's renewed confidence. However, the stock remains down approximately 2% year-to-date, highlighting the volatility it has experienced.

Morgan Stanley upgraded HPE to Overweight from Equal Weight, significantly raising the price target from $22 to $28. This bullish stance centers on the belief that the market is not fully pricing in the financial benefits expected to arise from the Juniper Networks acquisition. The firm's analysis suggests that if HPE traded in line with its peers, a bull case valuation of $39 could be justified. The analyst note also indicates anticipation of a modestly positive July quarter for enterprise hardware, driven by strong artificial intelligence spending and solid PC performance in the second quarter.

Analyst sentiment surrounding HPE has been in flux over the past year, largely influenced by the Juniper deal and broader market conditions. In December 2024, Morgan Stanley initially upgraded HPE, citing the acquisition's potential to boost earnings and improve valuation multiples. At that time, analysts projected that the networking segment could contribute a substantial portion of HPE's pro forma earnings post-acquisition.

However, by April 2025, Morgan Stanley reversed course, downgrading HPE due to concerns over elevated tariff risks and delays in the Juniper acquisition, specifically the scrutiny from the U.S. Department of Justice. This prompted a reduction in the price target, reflecting the uncertainty introduced by these factors. The firm revised its price target upwards again in May 2025, acknowledging the rise in the Enterprise Storage group, but maintained an Equal Weight rating due to lingering concerns about upcoming reports.

J.P. Morgan offered a contrasting view in July 2025, upgrading HPE to Overweight with a December 2026 price target of $30. This positive assessment was also driven by the anticipated benefits of the Juniper acquisition, which is expected to shift HPE towards higher-margin and less cyclical revenue streams. J.P. Morgan analysts project earnings to rise to $2.70 per share by fiscal 2027, with networking accounting for over half of HPE's profits.

Currently, HPE's stock is trading around $21.04, a slight decrease from the previous session, yet has risen 2.95% in this morning's pre-market.