Auriga Maintains a 'Hold' on Hewlett-Packard (HPQ); Expect Solid Quarter from HP, but Remain Wary of the Value Trap
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Price: $30.11 -3.8%
Rating Summary:
12 Buy, 23 Hold, 6 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
12 Buy, 23 Hold, 6 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Auriga maintains a 'Hold' on Hewlett-Packard (NYSE: HPQ) price target of $45.00.
Auriga analyst says, "We expect solid results from HP this Thursday, which might offer some near term relief after the past two quarters of weak results and bar reduction. Beyond the current quarter, we believe HP is facing headwinds in terms of both top-line growth and margin expansion due its under-investment in R&D over the past five years, and we are concerned with low earnings quality stemming from all the acquisitions in recent years. Low valuation multiples seem to be accounting for at least some of our concerns, but we believe there could still be more resetting of the bar to come for HP and thus prefer other names in the hardware space at this time."
"...We maintain our F4Q11 (Oct) estimates of $33.6Bn and $1.10 GAAP EPS versus the Street at $34.0Bn/$1.16. In addition, from a pure psychology point of view, we suspect that recently burned investors will have little interest in HP shares for at least four quarters, regardless of results or valuation, and more growth oriented investors may never return to the fold."
For more ratings news on Hewlett-Packard click here and for the rating history of Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $32.32 yesterday.
Auriga analyst says, "We expect solid results from HP this Thursday, which might offer some near term relief after the past two quarters of weak results and bar reduction. Beyond the current quarter, we believe HP is facing headwinds in terms of both top-line growth and margin expansion due its under-investment in R&D over the past five years, and we are concerned with low earnings quality stemming from all the acquisitions in recent years. Low valuation multiples seem to be accounting for at least some of our concerns, but we believe there could still be more resetting of the bar to come for HP and thus prefer other names in the hardware space at this time."
"...We maintain our F4Q11 (Oct) estimates of $33.6Bn and $1.10 GAAP EPS versus the Street at $34.0Bn/$1.16. In addition, from a pure psychology point of view, we suspect that recently burned investors will have little interest in HP shares for at least four quarters, regardless of results or valuation, and more growth oriented investors may never return to the fold."
For more ratings news on Hewlett-Packard click here and for the rating history of Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $32.32 yesterday.
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