Options Bulls, Analysts Blast HPE Stock

Citigroup and Deutsche Bank chimed in with price-target hikes

Assistant Editor
Aug 26, 2020 at 10:12 AM
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The shares of Hewlett Packard Enterprise Co (NYSE:HPE) are up 6.7% at $9.95 at last check, one of the better stocks on the New York Stock Exchange this morning. This comes after the tech con reported fiscal third-quarter earnings and revenue that topped analyst expectations. Following the news, Citigroup and Deutsche Bank hiked their price targets to $9 and $14, respectively. Elsewhere, Morningstar noted the company is on track in its shift to an "as-a-service" firm, but challenging market dynamics still lay ahead.

On the charts, today's pop has HPE breaking just above a  slew of moving averages that had been convening as pressure on the shares at around $9.80. Year-to-date, the stock is still down around 37%, and has traded in a tight range between $9 and $10.50 for most of the summer months.

It's no surprise then, that there is plenty of room for analyst upgrades, with nine of the 14 in coverage at a tepid "hold," one at a "strong sell," and four at a "strong buy."

Calls have ruled the roost in the last 10 weeks. HPE's 50-day call/put volume ratio of 10.61 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 79% of all other readings in its annual range. 

Today, options bulls are chiming in at full force. So far, 11,000 calls have crossed the tape -- 16 times what's typically seen at this point. Most popular is the weekly 8/28 10-strike call, where new positions are being opened. This means quite a few traders are betting on more upside for HPE by the contract's expiration at the end of this week. 

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