Hewlett Packard Enterprise Charting Smooth Course Through Fiscal 2022 Headwinds; Maintain $14 FVE

We maintain our $14 fair value estimate for no-moat Hewlett Packard Enterprise after the company posted fiscal third-quarter results in line with our expectations and upheld its guidance for the fiscal year. HPE is continuing to post solid results amid foreign exchange headwinds hampering top-line growth and supply constraints weighing on profitability. We see signs of demand tapering and coming back in line with supply, but the firm’s high backlog levels give us confidence in near-term results, and its commentary was markedly rosier than rival Dell’s a week ago. Still, we expect cyclicality for Hewlett Packard Enterprise, which underlies our no-moat rating. Shares rose lightly on positive guidance, and we view them as fairly valued.