Jefferies Gives New H-P (HPQ) CEO Whitman Eight 'Bucket List' Ideas for October

Jefferies issued comments on Buy-rated Hewlett-Packard (NYSE: HPQ) Wednesday, maintaining a $40 price target in the process.

The firm listed eight things that Meg Whitman needs to get done before the end of October in order to retain shareholder confidence.

Below is a list and brief summary of what Jefferies is expecting:

1. Stabilize the PC business - Jefferies gives two ultimatums, "1) immediately announce a commitment to the PC business (e.g., multi-year onsite warranties, partner with local banks to finance), or 2) have a private equity firm buy a stake in the company. Valuations are likely to be meager but keep a minority stake. Say $8B valuation (0.2x CY12E sales), keep 40% and take in ~$5B in cash to immediately buy back stock."
   
   
2. Make a commitment to mobile through a partnership - Jefferies suggests H-P sell webOS to Amazon (Nasdaq: AMZN) or Facebook. Commenting, "Both have the necessary content and ecosystem, and you agree to be a major hardware provider, making everything from cell phones, tablets to TVs. A truly connected world. Yes, TVs."
   
   
3. If keeping PC unit, split off design team and bring in new people - H-P's designs still trail Apple (Nasdaq: AAPL). Jefferies suggests, "Find a new head and have them deeply involved in the development process but unfettered by the existing bureaucracy. The consumerization of the enterprise means that superior design will become a necessity."
   
   
4. Make nice with Oracle (Nasdaq: ORCL) or commit to Salesforce (NYSE: CRM)/Microsoft (Nasdaq: MSFT) in a bigger way - Oracle provides an area for cooperation if H-P doesn't plan on selling its Enterprise business. Jefferies commented, "You have a large services business that Oracle could use to drive sales while Oracle could provide financing to win business (like the government of China does for Huawei and ZTE)."
   
   
5. Take a few big risks - See what coming out with PCs based on ARM (Nasdaq: ARMH) architecture will do, and "allow some talented software engineers to lead you beyond the PC era."
   
   
6. Explore more unique user interface (UI) methodologies - Invent a new category. Or, utilize things like gesture-based technologies, voice, and laser-projected keyboards.
   
   
7. Display competence, control, and optimism - Instead of shooting off end-of-quarter emails and holding "pointless" meetings, focus more on successes, listen to feedback, and hold more town hall meetings.
   
   
8. Integrate Autonomy to some extent - Jefferies suggests, "either by standardizing on IDOL or by creating very simple APIs that are almost plug-and-play."So there you have it, an "October bucket list" for Meg Whitman.
   
   
   Click here for more analyst color, or here for a ratings summary on H-P.
   Hewlett-Packard shares are 1.7 percent higher early Wednesday.

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