Transferring Coverage of Dell and HPE, Raising Our Valuations, HPE Attractive If It Can Execute

We have transferred coverage of Dell and Hewlett Packard Enterprise to a new analyst, and we are raising our fair value estimate for Dell to $92 from $65 and for HPE to $23 from $17. A large portion of both fair value raises was driven by lowering our cost of equity assumption for both companies to 9% from 11%. Other key drivers included higher revenue growth assumptions for both firms, along with some other slight, idiosyncratic changes for our HPE assumptions. We are maintaining our no-moat ratings for both firms, and we are increasing the Uncertainty Rating for HPE to High from Medium, while maintaining the High Uncertainty Rating for Dell.