Notable HP (HPQ) Bear Speaks, Says 'Recovery Unsustainable'

May 23, 2013 12:47 PM EDT
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Price: $14.73 --0%

Rating Summary:
    14 Buy, 22 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 9 | New: 1
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Goldman Sachs today maintained a Sell rating on Hewlett-Packard (NYSE: HPQ) with a modified price target of $17.00 (from $16.00). Yesterday HP reported solid Q2 results and strong cash flow guidance. Despite this and what Goldman admitted was an "impressive" quarter, analyst Bill Shope remains bearish.

"Overall, the company's execution this quarter was impressive. With that said, we are maintaining our Sell rating because we believe HP's businesses are facing even more distress than we originally anticipated, and we believe the company's short-term, restructuring-driven profit and cash flow recovery is unsustainable," said Shope.

Shope thinks challenges are in part related to years of underinvestment and aggressive cost cutting, a problem the company has not addressed. It is also highly exposed to distressed end markets.

For an analyst ratings summary and ratings history on Hewlett-Packard click here. For more ratings news on Hewlett-Packard click here.

Shares of Hewlett-Packard closed at $21.23 yesterday.

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