Unusual Options Activity Indicates Bullish Sentiment Toward Hewlett Packard Enterprise Ahead of Earnings
Investors are showing bullish sentiment toward Hewlett Packard Enterprise (HPE) ahead of its fiscal Q3 earnings release, as evidenced by unusual options volume in out-of-the-money put and call contracts. Despite a midday decline to $50.87 on September 1, HPE remains above recent lows but below an August peak. Large investors have shorted deep OTM puts at the $45 strike price and calls at $59 with expiration set for September 4, indicating confidence that the stock won't move significantly in either direction over three days. HPE is expected to report strong financial results due to increased capital expenditures by hyperscalers on AI and cloud infrastructure. Analysts forecast Q3 revenue of $11.94 billion (up from $9.14 billion a year ago) with EPS projected at 93 cents, up sharply compared to previous quarters. The company also generated strong free cash flow in the last quarter—$0.9 billion or 7.75% of sales—with analysts projecting continued growth. Analysts have raised price targets for HPE due to its improving financials and FCF outlook. Yahoo Finance reports an average target of $65.35, while Barchart estimates a mean survey PT at $68.39. Analysts project annual revenue could reach $45.05 billion in fiscal 2026 with potential for even higher free cash flow generation.
Tickers: $HPE
Topics: bullish sentiment earnings anticipation HPE options trading