HPE Reels in Bull Notes After Besting Analyst Estimates

The security currently sports attractively priced premiums

Digital Content Manager
Mar 3, 2021 at 9:39 AM
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The shares of Hewlett Packard Enterprise Co (NYSE: HPE) are up 0.3% at $14.55 at last check, after the tech concern reported better-than-expected first-quarter earnings of 52 cents per share -- higher than Wall Street's estimates of 41 cents per share -- as well as a revenue beat. The company also raised its fiscal year 2021 guidance above analysts' estimates. In response, the equity earned no fewer than six price-target hikes this morning, including one from J. P. Morgan Securities to $17 from $16. 

On the charts, the security is fresh off a March 1, annual high of $14.97. Shares pivoted higher in November, with support from the 40-day moving average, which also stepped in to contain a January pullback. And while overhead pressure at the $15 level remains, HPE has added 53.1% over the past six months. 

Analysts are mostly pessimistic towards the stock, leaving plenty of room for upgrades moving forward. Of the 12 analysts in question, seven carry a tepid "hold" or worse rating. Meanwhile, coming into today, the 12-month consensus target price of $14.78 was in line with last night's close. 

The security could also benefit from a shift in the options pits, which leans bearish. This is per HPE's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 85% of readings from the past year. In other words, puts are being picked up at a faster-than-usual pace.

Lastly, HPE options can be bought at a discount at this time. The stock's Schaeffer's Volatility Index (SVI) of 47% sits higher than just 15% of all other readings in its annual range, suggesting options players are pricing in relatively low volatility expectations right now. 

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