Wells Fargo Securities Reiterates Outperform Rating on Hewlett-Packard Ahead of Q3 Results

In a report published Tuesday, Wells Fargo Securities analyst Maynard Um reiterated an Outperform rating on Hewlett-Packard Company HPQ. In the report, Wells Fargo Securities noted, “While we do not expect HP to be immune from broader IT industry revenue pressures (our estimate: $27.6B estimate; Street: $27.3B), we believe there is potential upside to our FQ3 EPS estimate of $0.88 (Street: $0.87) driven by benefits from restructuring, mix, currency, and share buybacks. We believe it will be a tale of two stories with revenue pressures across a number of segments, but areas of momentum in products such as 3Par, Moonshot (albeit still early) as well as slower service runoff and some stabilization in printing. We expect margins to be the potential area of upside with restructuring, mix, and currency helping and anticipate HP to show FCF tracking ahead of its $7.5B in free cash flow projection for FY2013.” Hewlett-Packard Company closed on Monday at $25.88.