HPE
Hewlett Packard Enterprise Company
$46.73
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 26.5% above fair value
You pay
$46.73
Bear
$29.56
Fair
$36.95
Bull
$44.34
Bear
$29.56
-36.7%
$1.54 × 12x P/E
Fair
$36.95
-20.9%
$1.54 × 15x P/E
Bull
$44.34
-5.1%
$1.54 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
30.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $69.27 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $36.95 per share.
Warnings
Dividend-based valuation: $11.58 (below our primary estimate by 50%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $69.27 (from 39 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples