According to Deutsche Bank, a relative bright spot in the tech space this year is headed back to the pack. Analyst Sidney Ho downgraded Hewlett Packard Enterprise to prevent a buyout, saying in a note to clients that the company was due for a slowdown in growth. “We believe the stock is likely to be range bound in the near to medium term. While HPE saw 20% + y/y order growth for four consecutive quarters, we expect order growth to pick up as IT spending begins to decline. The decline (or turning negative) will begin to slow down,” Ho said. Shares of HPE have outperformed other tech stocks this year, falling nearly 13% in 2022. For comparison, Invesco QQQ Trust is down more than 30%. Supply chain issues have been one of the issues facing the tech this year, and it could hurt HPE. “We also note that HPE’s supply chain has lagged behind its peers, which could lead to share losses as demand trends remain supply-driven,” Ho said. Deutsche lowered its price target from $18 to $16 per share. Where the stock closed on Monday, the new target is about 16.8 percent higher. Deutsche, however, hasn’t completely soured tech stocks. In the same note, Ho upgraded to buy NetApp, citing growth in its public cloud business and stock buybacks. — CNBC’s Michael Bloom contributed to this report.
