This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

HP Slips as UBS Cuts Estimate

NEW YORK ( TheStreet) -- HP (HPQ - Get Report) shares slipped more than 1% on Thursday after UBS cut its earnings estimate and price target, just days after the embattled PC maker was dropped from the Dow Jones Industrial Average.

Citing HP's underwhelming third-quarter results last month, UBS warned that the tech giant could give disappointing earnings guidance at its analyst meeting on Oct. 9.

"We expect that the disappointment of F3Q will impact the earnings guidance at the meeting, partially offset by a solid free cash flow expectation and an increased share repurchase program," wrote UBS analyst Steven Milunovich, in a note.

UBS reduced its fiscal 2014 earnings estimate for HP to $3.55 a share from $3.80 a share. It also cut the company's price target to $24 a share from $28 a share.

HP shares dipped 1.26% to $21.99 during late morning trading on Thursday, easily outpacing the 0.2% and 0.1% declines on the Dow and the S&P 500, respectively.

Led by CEO Meg Whitman, HP is in the throes of a massive restructuring effort, but continues to wrestle with the effects of a tough PC environment. HP's Personal Systems revenue was down 11% year over year during its third quarter.

The company also announced changes to its leadership team last month, with Chief Operating Officer Bill Veghte becoming executive vice president and general manager of the company's Enterprise Group, and Dave Donatelli, who previously led the group, taking on a new role identifying early stage technologies.

"After initial progress in its turnaround, HP is finding the going tougher as reflected in Meg Whitman backing off on the prospect of revenue growth in F14," wrote Milunovich. "Recent management changes will take time to have a positive impact."

Lifted by positive sentiment toward HP's turnaround potential, the company's shares rallied significantly this year, but have slumped more than 14% since it reported its third-quarter results.

HP, along with Alcoa (AA) and Bank of America (BAC), was recently dropped from the Dow, underlining the company's ongoing challenges.

Like an oil tanker captain attempting to perform a U-turn, Whitman faces a Herculean task breathing new life into the one-time Silicon Valley icon. This task is made even more difficult by a harsh competitive landscape where HP's PC business remains under intense pressure from the likes of Apple's (AAPL) iPad.

Tech research firm IDC earlier this week forecast that tablet shipments will surpass total PC shipments in the fourth quarter of 2013, and annually by 2015.

--Written by James Rogers in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HPQ $31.49 -1.60%
AAPL $123.22 -0.82%
FB $83.30 0.35%
GOOG $548.13 -1.30%
TSLA $185.15 -2.80%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs