Hewlett-Packard (HPQ) Q2 Performance Wins Praise on Wall Street; Jefferies Raises to Hold

May 23, 2013 9:05 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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This morning Jefferies analyst Peter Misek upgraded Hewlett-Packard (NYSE: HPQ) from Underperform to Hold with a price target of $24.00 (from $18.50). The change follows HP's Q2 results. While revenue missed, cash flow guidance gave Misek and others on Wall Street reason to feel less bearish, helping lift shares.

"HP is ceding PC market share to retain profitability. We believe this is the right strategy. We had expected HP would have trouble maintaining its discipline; however, given stabilizing PC ASPs, we believe HP is maintaining its profitability goals under Meg Whitman," said Jefferies.

Improved cash flow guidance surprised Misek.

"The results and the $7.5B cash flow guidance update materially changed our view of HP's margin, cash flow, and EPS prospects. We are now more comfortable with HP's potential ability to execute its new printing strategy, control costs, and maintain profitability," he said.

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 $21.23 yesterday.

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