Shares of Hewlett Packard Enterprises Co. (HPE) sank 2.4% in premarket trading Friday, after J.P. Morgan analyst Paul Coster turned bearish on the information technology company, citing concerns over valuation given "tough" near-term fundamentals. Coster cut his rating to underweight from neutral, as the stock closed Thursday at $16.41, or 2.5% above his $16 stock price target. "Looking into 2020 we see few catalysts, softer 1H20 term data center hardware demand, and materially lower share buybacks relative to the past 2 years," Coster wrote in a note to clients. And HPE seems to be making a big strategic commitment to everything "as-a-service," which introduces risk and complexity into the sales process. "At minimum this transition could take a couple of years and interpretation of financial results could get harder as a result," Coster wrote. The stock has run up 16.1% over the past three months through Thursday, while the S&P 500 has gained 2.8%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 01, 2019 09:29 ET (13:29 GMT)
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