Brean On Hewlett-Packard Company: No 'Separation Anxiety' Following Split

Hewlett-Packard Company HPQ announced on Monday that it plans to separate itself into two public companies. On Tuesday, Ananda Baruah of Brean Capital released a note to clients explaining why the company's move should create additional shareholder value. "We view yesterday's announced separation plan very favorably for the stock, as we believe the transaction will unlock shareholder value as well as create more nimble organizations that are better able to respond to changing industry dynamics," Baruah wrote. Related Link: Hewlett-Packard Company Split Could Pressure IBM To Do The Same Baruah raised his price target from $40 to $45, while reiterating a Buy rating on Hewlett-Packard based on the low-end of his sum-of-the parts valuation. The analyst said that shares could be valued as high as $50 under a best-case scenario. Baruah believes that Hewlett-Packard's announcement is merely the first stage towards the company achieving a set of goals and objectives. The second stage consists of the company more actively pursuing consolidation in the PC industry, putting more energy around 3D Printing and Industrial Production Printing, and increased focus on mergers and acquisitions within the Enterprise space.