Hewlett Packard Enterprise stock falls 11% after analyst downgrade despite 159% year-to-date rally

Hewlett Packard Enterprise shed nearly 11% on September 14, closing at $55.41, after Evercore ISI pulled its bullish rating on the stock. Analyst Amit Daryanani moved HPE from “Outperform” to “In Line,” a Wall Street euphemism for “the easy money has been made.” The timing stings. HPE had been one of the year’s best performers, climbing roughly 159% year-to-date through September 11 on the back of surging demand for AI-optimized servers and a Juniper Networks acquisition that actually went well. Now a single downgrade wiped out $6.68 per share in a single session. A valuation problem, not a business problem Daryanani kept his $65 price target intact, which tells you something important. Evercore isn’t arguing that HPE’s business is broken. It’s arguing that the stock got ahead of itself. The math backs that up. HPE was trading at roughly 13 times fiscal 2027 earnings before the drop. Its five-year average multiple sits around 8 times. That’s a 60% premium to historical norms, which is a lot to pay even for a company riding the AI infrastructure wave. HPE’s most recent quarterly results were genuinely strong. Revenue hit $12.21 billion for the July quarter, a 33.7% jump year-over-ye...