UPDATE: Morgan Stanley Reiterates on Hewlett-Packard Following Margin Recovery
In a report published Thursday, Morgan Stanley analyst Katy L. Huberty reiterated an Overweight rating on Hewlett-Packard (NYSE; HPQ), and raised the price target from $34.00 to $36.00.
In the report, Morgan Stanley noted, “We raise our FY15-16 EPS estimates above consensus on the back of a margin recovery in Enterprise Services. We assume HP achieves the midpoint of its target margin range (7-9%) in FY16, which is still below CSC's 9% in 2014, the company's closest peer. This is despite HP's slightly more favorable revenue mix and similar restructuring initiatives. We increase our price target to $36 from $34, which implies 9x FY15 EPS of $4.05.”
Hewlett-Packard closed on Wednesday at $32.72.
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