Competition regulators are currently evaluating Hewlett Packard Enterprise Co.’s purchase of Juniper Networks for $14 billion. The stock of HPE has experienced volatility following reports that the UK government has launched an investigation into the acquisition due to potential competition concerns. Despite this, the stock has been relatively stable, trading flat at $21.87 and showing a year-over-year increase of 31.2%. HPE has closed only three sessions lower since the beginning of the month and recently reached a record high of $22.81. The stock is currently trading above most long- and short-term moving averages, indicating a positive trend.
Among the brokerage group, there is a sense of optimism regarding HPE’s performance, as 11 out of 14 firms covering the stock still rate it as a “Hold.” The 12-month consensus price target of $20.42 represents a 7.7% discount from the current trading level. Despite this, there is still confidence in the stock’s potential.
In terms of trading activity, there has been a significant increase in call options, with 35,000 calls already traded, which is double the average intraday volume. The most active contract is the December 35 call, with new positions being opened there. This indicates a bullish sentiment among traders regarding HPE’s future performance.
Overall, while the investigation into the acquisition of Juniper Networks has caused some volatility in HPE’s stock, the company’s overall performance remains positive. With strong year-over-year growth and relatively stable trading, HPE continues to show promising signs for investors. The increase in call options trading further reinforces the confidence in the company’s future prospects, despite the regulatory scrutiny it is currently facing.
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https://www.schaeffersresearch.com/content/news/2024/06/20/hewlett-packard-enterprise-stock-volatile-amid-u.k.-probe