A Valuation Turnaround Call for HP (HPQ)

UBS has raised H-P to “Buy” from “Neutral” and its new price target objective is $52.00 rather than the $48 previously offered.  The call is effectively one of valuation, but the report does note margin expansion initiatives under Leo Apotheker as its new CEO.  The growth driver is services, with the 3Com and 3Par buys noted favorably as well.

Due to its sell-off in 2010, we listed H-P as one of the best six DJIA targets with the most implied upside for 2011.  We would note that this morning’s upgrade is even under what the consensus target was from Thomson Reuters at the time.  Part of the reason for the expected upside is simple: H-P was also named as one of The Sloths of the DJIA for 2011.

After the open, H-P shares are seeing a gain of 1.4% to $45.49; the 52-week trading range is $37.32 to $54.75.

JON C. OGG