Hewlett Packard Enterprise Co (NYSE:HPE) shares are trading higher after it reported its fourth-quarter results after Thursday’s closing bell.

The company reported adjusted EPS of 58 cents, which beat the analyst consensus estimate of 56 cents. Sales rose 15% year over year (Y/Y) to $8.46 billion, which beat the analyst consensus estimate of $8.26 billion.

Hewlett Packard sees first-quarter earnings of between 47 and 52 cents per share versus the 49 cent estimate.

Stifel analyst Matthew Sheerin raised the price forecast on the HPE stock to $25 from $22 while maintaining a Buy rating.

The analyst believes Hewlett-Packard Enterprise shares are undervalued, supported by its broad portfolio of infrastructure hardware, software, and services.

Despite mixed demand, with weakness in networking and storage, HPE is seeing strong AI server demand and signs of recovery in traditional servers, adds the analyst.

Sheerin expects AI servers to drive growth in FY25 and for gross margins to improve through a better mix and higher software and services attachment.

The analyst revised estimates for revenue to $32.250 billion (from $31.749 billion) and EPS to $2.11 (from $2.10) for FY25 on the continued server strength and introduced FY26 revenue of $33.803 billion and adjusted EPS of $2.29.

JP Morgan analyst Samik Chatterjee writes that he expects a choppy outlook for HP Enterprise following mixed earnings from industry leaders.

The analyst anticipates some upside in its Enterprise Server and Networking segments, though AI server headwinds and potential Fed spending slowdowns may impact guidance.

Chatterjee estimates revenue of $8.24 billion in the fourth-quarter vs. consensus of $8.26 billion.

B Of A analyst Wamsi Mohan reaffirmed a price target of $26 and a Buy rating.

Heading into FY25, the analyst believes HPE is well-positioned to benefit from a recovery in IT spending, driven by cyclical growth in servers, storage, and networking and the Juniper acquisition and associated cost savings.

The analyst also adds that the strength in Hybrid Cloud and higher AI server margins due to increased enterprise and sovereign demand are expected to be drivers.

Goldman Sachs analyst Michael Ng raised the F25/26/27 EPS estimates by an average of 2% to reflect the growing AI pipeline and storage momentum.

Investors can gain exposure to the stock via the First Trust S&P 500 Diversified Dividend Aristocrats ETF (NASDAQ:KNGZ) and the Roundhill Generative AI & Technology ETF (NYSE:CHAT).

Price Action: Hewlett Packard shares are up 10.80% at $23.99 at the last check Friday.

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