HPE – Market expectations are for Uniform ROA to fade, and management may have concerns about supply chain disruptions, demand, growth, and profitability

• Hewlett Packard Enterprise (HPE) currently trades below corporate and near historical averages relative to Uniform earnings, with a 15.6x Uniform P/E (Fwd. V/E’).
• At these levels, markets are pricing in expectations for Uniform ROA to decline to 8%, accompanied by 3% Uniform asset growth.
• Meanwhile, analysts expect Uniform ROA to only fade to 11% levels through 2023, accompanied by 2% Uniform asset growth.
• If sustained going forward, these levels would imply a stock price closer to $21, representing approximately 39% potential equity upside for the firm.
• That said, the firm’s most recent earnings call suggests management may have concerns about supply chain disruptions, demand, growth, and profitability.