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HP: Beware of the 5-Year Hangover

Set against this backdrop, UBS analyst Steven Milunovich also lowered his HP price target on Thursday, from $16 to $14. The analyst, who has a "sell" rating on the stock, said that more drastic action may be needed.

"We are impressed with HP's enterprise offerings, though whether it can outsell IBM (IBM - Get Report), Oracle (ORCL) and EMC (EMC) in converged infrastructure remains to be seen," he wrote. "We still think structural change, such as breaking up the company, may be required. Although individual business units are becoming more focused, the overall strategy still is to be all things to all people."

HP gave no indication of such a drastic strategy change on Wednesday, and clearly prefers to face a difficult future with all of the firm's constituent parts. Whitman, however, did discuss critical plans to streamline HP's bewildering array of products, reconnect with channel partners, consolidate marketing and improve internal IT systems.

Whether this is enough, though, remains to be seen. "In our view, the turnaround strategy is still unclear," noted Jefferies analyst Peter Misek, lowering his price target from $14 to $12 on Thursday. Misek rates HP shares "underperform."

After a turbulent few years in Palo Alto, marked by a succession of CEOs, poor execution and a lack of strategic direction, investor reaction to the feeble outlook and the long-term turnaround story was understandably negative. HP shares plunged almost 13% on Wednesday, hitting a new 9-year low, and were off 1.1% on Thursday at $14.74.

--Written by James Rogers in New York.

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