Andrew Burton/Getty Images
HP Enterprise shares gained more than 3 percent after an upgrade by Evercore analyst Amit Daryanani

Hewlett Packard Enterprise (HPE - Get Report) shares added 4.2% Monday after Evercore ISI analyst Amit Daryanani raised his rating to in line from underperform.

He set a new price target of $15, up from $13, Barron's reported.

The shares of HPE, a supplier of IT infrastructure products and services, finished at $14.95 Monday.

HP Enterprise shares had slid 23% in 2019 through Friday and Daryanani views them as cheap. They trade at 8 times forward earnings and 9 times enterprise value to free cash flow, he calculates.

Daryanani likes the company's "cash flow resiliency," Barron's reports. He sees underlying free cash flow above $2 billion a year.

HPE's long-term target of more than $2.5 billion in annualized free cash flow is on the mark, he says.

HP Enterprise's $1.4 billion purchase of Cray in September could add to earnings per share, Daryanani says.

In addition, recent data indicate that H3C, a joint venture with China's Unisplendour, has been outselling competitors Cisco (CSCO - Get Report) and Dell (DELL) in China, he says, according to Barron's.

Cisco is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CSCO? Learn more now.


This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.