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Consumer Electronics

A Valuation Turnaround Call for HP (HPQ)

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By Jon C. Ogg Updated Published
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Hewlett-Packard Co. (NYSE: HPQ) is a truly different company without Mark Hurd.  After his departure and ouster, the stock never found its way back to normal in 2010 despite a bull market.  That bias may be changing if a research report has caught the right turnaround and valuation angle this morning.

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

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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