Benzinga | Jul 26, 2021 06:50AM EDT

Evercore Upgrades Hewlett Packard To Outperform, Increased Price Target Implies 42% Upside

* Evercore ISI analyst Amit Daryanani upgraded Hewlett Packard Enterprise Co (NYSE: HPE) to Outperform from In-Line with a price target of $20, up from $16, implying a 41.8% upside.

* Daryanani believes that the stock can outperform substantially at the current valuation and the low multiple provides a healthy level of downside protection.

* He estimates HP Enterprise, via a combination of organic tailwinds and self-help levers, should see a path toward mid-teens EPS/free cash flow growth over the next few years, which should enable the stock to work toward a $20-plus price.

* Daryanani considers the H3C stake and Oracle Corp (NYSE:ORCL) lawsuit win as sizable value creators that could extend optionality for HP Enterprise.

* Price action: HPE shares traded higher by 1.13% at $14.26 in the premarket session on the last check Monday.