UPDATE: Sterne Agee Upgrades HP to Buy, Reduces Estimates
In a published report, Sterne Agee raised its rating for Hewlett Packard Company (NYSE: HPQ) from Neutral to Buy and sees upside price target at $34 per share as it sees uncertainty lifted and stock as widely oversold. Estimates are adjusted down on a widely expected guide-down.
According to Sterne Agee, “Our sense talking to investors over the last few weeks is that expectations are that new CEO Meg Whitman will lower the bar to reset expectations. This makes sense coming in as the new CEO but also as global macroeconomic conditions remain very challenging. We have heard as low as $3.00-$4.00 in EPS. While we agree that numbers need to come down, we believe they will be better than feared, likely in the $4.30-$4.40 EPS range. … we believe shares are arguably oversold trading at 5-6x CY12 EPS. We believe its multiple trading could expand to 7-8x as investors get more comfortable with HPQ's turnaround efforts.”
HPQ closed at $27.29 on Thursday.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.