Hewlett Packard Enterprise (HPE) had a bit of a rollercoaster Wednesday. The stock initially climbed in sympathy with Dell Technologies (DELL), which posted a blowout second quarter. But the gains didn't stick, and shares were trading lower by the afternoon.
Dell reported adjusted earnings of $7.04 per share, crushing the consensus estimate of $4.91. Revenue came in at $46.97 billion, also topping the Street's expectation of $44.95 billion. That kind of performance tends to lift the whole sector, and HPE rode that wave briefly.
Earnings Due Wednesday
Now all eyes turn to HPE's own fiscal third-quarter results, due after Wednesday's closing bell. Analysts are looking for earnings of 93 cents per share, up from 44 cents a year earlier. Revenue is projected at $11.94 billion, compared with $9.14 billion in the same quarter last year.
The stock carries a Buy rating with an average price target of $69.47. Recent analyst moves have been mixed but generally positive. Deutsche Bank initiated coverage with a Buy rating and a $62 price target on Sept. 1. Bank of America Securities maintained its Buy rating and raised its target to $82 on Aug. 31. Morgan Stanley upgraded HPE to Overweight but trimmed its target to $69 on Aug. 10.
Hewlett Packard Expands Tottenham Hotspur Partnership
In other news, HPE and Tottenham Hotspur announced Wednesday that they're expanding their partnership to modernize the club's stadium technology. HPE will upgrade systems that handle ticketless entry, cashless payments, mobile apps, and digital navigation. The project consolidates eight technology locations into two core environments.
Tottenham will also deploy outdoor Wi-Fi 7 and use artificial intelligence to monitor network performance, automate operations, and address technical issues. HPE will provide financing, deployment, and ongoing operational support.
Technical Analysis
Let's look at the charts. HPE's longer-term uptrend remains intact. The stock trades 1.4% above its 50-day simple moving average of $49.76. It's also 16.6% above its 100-day average of $43.26 and 53.1% above its 200-day average of $32.94.
However, HPE trades 7.1% below its 20-day average of $54.31, signaling weaker near-term momentum. The moving average convergence divergence (MACD) indicator is also bearish, with the MACD below its signal line and a negative histogram. Both suggest buying momentum has faded.
Still, the broader technical picture favors the bulls. The 20-day average remains above the 50-day average, and the 50-day average remains above the 200-day average following an April golden cross. Resistance sits near $51, while support stands near $43.50, close to the stock's 100-day moving average.
Fund Exposure
It's also worth noting which funds hold HPE shares. The Nuveen ESG Mid-Cap Value ETF has a 3.48% weighting in HPE. The Bancroft Fund Ltd. has a 2.66% weighting, while the Adaptiv Select ETF has a 5.72% weighting. Flows into or out of these funds could lead to additional buying or selling of HPE shares.
At the time of publication Wednesday, HPE shares were down 1.22% at $50.25.
