UPDATE: Morgan Stanley Upgrades Hewlett-Packard to Overweight on Restructuring Savings

In a report published by Morgan Stanley, analyst Katy L. Huberty Upgraded Hewlett-Packard HPQ from Equal-weight to Overweight with a $27 price target. Morgan Stanley reported that. “We see several drivers of FCF and EPS growth next year. First, EPS will benefit from the full $2.2 billion in cost savings by the end of FY14. FCF will also benefit from $500 million less restructuring cash outflow. Second, we see early signs that employee morale is improving with the higher stock price and leaner infrastructure, which sets up for better execution in businesses like PCs and Services where margins are currently at trough levels. Third, HP printer margins should benefit from a weaker Yen starting in F2H13. Lastly, a return to low 20s cash conversion cycle can drive incremental FCF.” Shares of Hewlett-Packard closed at $22.18 on Friday.