Wells Fargo Securities Reiterates Outperform Rating on Hewlett-Packard Company on Positive FY14 Outlook

In a report published Thursday, Wells Fargo Securities analyst Maynard Um reiterated an Outperform rating on

. In the report, Wells Fargo Securities noted, “HP's quarter was a tale of two stories, though perhaps slightly different than we had expected with some change in tone. Headline revenue and EPS were slightly below heightened expectations into the quarter with full year guidance narrowed to the mid-point of previous guidance though free cash flow (which is one of the most important metrics to us) outperformed and the company raised FY2013 cash flow guidance. The issue? Management commentary on industry challenges, pricing pressure, leadership changes, some FCF headwinds pushed into FY2014, commentary of no longer expecting FY2014 revenue growth, and lack of margin benefits from several factors. However, we believe there are some positive drivers into the back half and also think expectations for HP's October Securities Analyst Day has swung to become too bearish. Clearly it may be difficult for investors to look past management's tone on the conference call and while the stock is likely to be range bound until then, we believe the outlook painted by management could be conservative. While the current quarter might suggest otherwise, we believe it was impacted by macro and unexpected execution issues, which we believe management is now embedding into guidance. We reiterate our Outperform rating.” Hewlett-Packard Company closed on Wednesday at $25.38.