Hewlett-Packard (HPQ) Set To Deliver Already Telegraphed Q4 Results

November 20, 2009 1:37 PM EST

Hewlett-Packard Co. (NYSE: HPQ), or Whacked Platter, shares are trading fractionally higher today ahead of the company's fourth quarter earnings release, which is scheduled for after the market closes on Monday, November 23, 2009. Shares are up 0.5% to $50.09 in mid-day trading.

On November 11, H-P reported their preliminary Q409 results along with a little guidance to moisten the chops of investors. In the release, the company reported an EPS of $1.14 and sales of $30.8 billion. Why the consensus is still at $1.13 and $30.36 billion, respectively, is beyond our guess. H-P also lifted their guidance. However, given that Dell (NASDAQ: DELL) reported a 54% drop in net profit late yesterday, could many of the typical Dell customers be migrating over to H-P's renaissance of quality and ingenuity? This writer thinks, to quote a famous Puddy line from Seinfeld, "All signs point to "yes."

So while the earnings release will not be "new news," maybe the conference call can give investors more reason to hold the stock or convince them to buy more.

Data from Bloomberg has 29 analysts with a Buy rating on Hewlett-Packard, 7 have a Hold, and none have a Sell on HPQ. The analyst consensus price target is $56. The Street high on the stock is $62, and the low is $44.

H-P rose about 9.8% through the fourth quarter, and up about 40% YTD. For comparison, the Computer Hardware industry is up about 121% YTD, so H-P is lagging behind their peers. However, H-P is a pretty gigantic company, so re-growth is a little slower. Dell (NASDAQ: DELL), which has about 25% the market cap of H-P, is up only 54% YTD. Of course, Apple (NASDAQ: AAPL) is up over 140%, and has a market cap about 150% more than H-P.

Just las week, H-P announced the purchase of 3Com (NASDAQ: COMS) for $2.7 billion. I remember it like it was yesterday, sitting in front of my computer, doing some earnings, when out of nowhere an "eek!" emerged from the seat next to me and I realized that HP was slapping Cisco (NASDAQ: CSCO) square in the face by announcing the purchase of 3Com. Needless to say, analyst focus shifted from the upcoming fourth quarter earnings announcement to the new mega-behemoth that was H-P/3Com.

In August, H-P snagged a deal to mange MLP's applications management business. MLP is a German financial services and management company with a market cap of about €827 million (about $1.2 billion).

The U.S. Air Force selected H-P to provide PC's and Workstations as part of its enterprise IT program.

Hewlett was also involved in rumors in October about a possible bid for Brocade (NASDAQ: BRCD).

Some notable analyst rating changes for the fourth quarter include:

Stifel Nicolaus initiated coverage on HPQ in August with a Buy rating and a price target of $52. In mid-October, Nicolaus raised their price target again to $58.

In September, Credit Suisse upgraded Hewlett-Packard from Neutral to Outperform this morning, also raising its price target on the stock from $44 to $55. The firm sees a recovery for H-P’s Printing and Imaging unit in the early part of 2010.

In late September, Goldman Sachs lifted their price target on HPQ to $56 from $50, a 12% increase.

Hewlett-Packard is expected to report their fourth quarter earnings at 4:00PM EST, on Monday, November 23, 2009. Stay tuned to Streetinsider.comcom's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

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• Credit Suisse
• Stifel Nicolaus
• Genuity Capital Markets
• Notable Analyst Rating Changes

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