Auriga reiterates a 'Buy' on Hewlett-Packard (HPQ); Advice to Meg Whitman

Auriga reiterates a 'Buy' on Hewlett-Packard (NYSE: HPQ) price target of $32.00.

Auriga analyst says, "HP confirmed that Meg Whitman is replacing Leo Apotheker as CEO, a move that we believe is a first step in the right direction and should be viewed positively by the Street. Our positive thesis on HPQ shares is based on a three-pronged scenario analysis which includes a base case where HP muddles forward, a bull case where maximum value is extracted, and a bear case where management mis-executes their way to obscurity. The weighted average value of these outcomes suggests a target price of $32, which is materially above the current share price, which suggests to us that the current share price represents an attractive risk/reward. We view the CEO change as a step in the right direction toward achieving the more bullish scenarios..."

"Our advice to Ms. Whitman to regain investor support and a better valuation multiple : 1) Make a decision on PCs immediately, 2) act quickly in regards to making any additional changes in the senior management ranks, 3) eliminate bogus and misleading non-GAAP accounting beginning next quarter, 4) provide more clarity about performance of acquisitions going forward, 5) plug the leaks that seem to constantly come from HP's board, and 6) Execute."

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 $22.80 yesterday.

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