Hewlett Packard Enterprise Upgraded To Buy On Potential Dividend Increases

Shares of Hewlett Packard Enterprise Co. rose 2% in premarket trade Monday after the stock was upgraded to buy from neutral at Citigroup. Analyst Jim Suva also raised his 12-month price target on the stock to $25 from $20, implying 25% upside from Friday's closing price. Suva believes investors are underappreciating Hewlett Packard's ability to generate free cash flow, which puts it in a better position to raise dividends. Once it completes the spin-off of its services business, a deal announced in May after Hewlett Packard spun from HP Inc. , Suva said the company could double its dividend payouts to roughly 46 cents a share from 22 cents currently. Shares of Hewlett Packard have risen 16% over the last three months, outperforming the S&P 500 , up 4.2%.