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HP (HPQ) Upgraded to 'Can't Get Much Worse'; Time to Divest PC, Printing

January 14, 2013 11:56 AM EST Send to a Friend
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Price: $36.67 +1.13%

Rating Summary:
    18 Buy, 16 Hold, 5 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 16 | Down: 14 | New: 38
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This morning shares of Hewlett-Packard (NYSE: HPQ) moved higher in part because of an upgrade by analysts at JP Morgan. Analysts upgraded the stock to Neutral and raised their price target to $21 (from $15).

Analyst Mark Moskowitz summarized the firm's view by saying, "With HP, our view is that the headline news just cannot get much worse."

Moskowitz thinks a turnaround will take years, and he is not overly optimistic about the company's growth prospects. However, if HP divested some of its assets, things might change.

"A break-up of the current business model, particularly the divestiture of PCs or printing, could make us become more constructive on the stock," said Moskowitz. "In the interim, HP's services revenue shortfall still has not fully asserted itself on the model, which could present more downside risk to numbers, but we think that investors have adjusted for the most part for this near-term risk."




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