HP (HPQ) Declines, PC Bear Says He Wasn't Bearish Enough

April 11, 2013 10:36 AM EDT
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Price: $14.73 -0.87%

Rating Summary:
    14 Buy, 22 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Shares of Hewlett-Packard (NYSE: HPQ) opened lower on Thursday, a decline tied to an IDC report that showed a steep drop in Q1 PC sales. The report showed HP's units were down 24 percent year-over-year and Dell (Nasdaq: DELL) units down 11 percent, while the overall PC market was down 14 percent. Unsurprisingly, the decline is tied to increasing sales of smartphones and tablets, poor uptake of Microsoft (Nasdaq: MSFT) Windows, and weak enterprise demand for Windows 8.

According to analysts at Deutsche Bank, the decline could result in a large Q1 revenue miss at Hewlett-Packard.

"The implications are negative for all PC manufacturers but particularly bad for HPQ," said analyst Chris Whitmore. "We cut our 2013 PC estimate to -5% Y/Y in January; this data suggests that even our relatively bearish estimate for the year is already looking too high."

"With Dell turning more aggressive on pricing; we think margins will follow units lower as vendors compete for scale in a structurally declining market,” added Whitmore.

Deutsche Bank has a Sell rating on Hewlett-Packard with a price target of $12.00

For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.

Shares of Hewlett-Packard closed at $22.32 yesterday.

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