HPE Just Dodged A DOJ Roadblock, Now It's All-In On Juniper And AI

Hewlett Packard Enterprise Co HPE has reached a settlement with the Department of Justice around the acquisition of Juniper Networks Inc JNPR and is likely to focus on getting "the deal done as quickly as possible," according to BofA Securities.

The Hewlett Packard Enterprise Analyst: Analyst Wamsi Mohan maintained a Buy rating, while raising the price target from $20 to $23.

The Hewlett Packard Enterprise Thesis: The announcement is positive as it gives the company an opportunity for accelerated growth and margin expansion through cross-selling and platform unification with Juniper Networks, Mohan said in the note.

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The combined entity, following the acquisition, would be positioned to offer "an end-to-end networking and AI infrastructure stack that can better compete in AI enabled datacenter and cloud-edge environments," the analyst wrote.

The acquisition would be a catalyst for multiple expansion as well as long-term earnings growth, he added.

As per the DOJ settlement, Hewlett Packard Enterprise has agreed to divest InstantOn and auction licenses for two of Juniper Networks' Mist AIOps source code packages, Mohan said. These concessions "are narrow in scope and preserve the core strategic rationale" of the acquisition, he further stated.

HPE Price Action: Shares of Hewlett Packard Enterprise had risen by 13.04% to $20.81 at the time of publication on Monday.

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