UBS Maintains a 'Neutral' on Hewlett-Packard (HPQ); Q1 Preview

UBS maintains a 'Neutral' on Hewlett-Packard (NYSE: HPQ) price target raised from $26.50 to $30.00.

UBS analyst says, "We raise our price target on modest multiple normalization. Although we believe focus on profitability will help drive margin improvement (at the expense of revenue), we believe HP will double R&D focus across business units to drive organic growth, which we think will limit material margin expansion. We continue to view 2012 as a transition year & maintain our rating."

"Checks suggested a challenging Jan month due to drive shortages though Feb appears to have picked up. PSG was likely also affected by weak consumer PCs & we anticipate inline IPG sales given Lexmark (NYSE: LXK) & Canon (NYSE: CAJ) results. While we believe this may impact revenue, we see potential upside to HP’s guidance of $0.83-$0.86 (UBSe: $30.4bn/$0.87; Street: $30.8bn/$0.87) as our margin assumptions in storage/servers & PCs are likely too conservative."

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 $29.59 yesterday.

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