
HP Inc. (HPQ) Stock Jumps on Hewlett-Packard Separation, Jim Cramer Weighs In
NEW YORK (TheStreet) -- HP Inc. (HPQ) - Get Report shares are rallying 5.56% to $12.92 in early morning trading on Monday, its first trading day on the NYSE since the computing giant Hewlett-Packard split into two separate entities over the weekend.
Hp Inc. will sell computers and printers and Hewlett Packard Enterprise, which will trade under "HPE" on the NYSE, will sell commercial computers systems, software and tech services.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio, commented on the two companies, saying: "The Enterprise business is being valued too cheaply and can be attractive, the Printer business -HP Inc is very cheap versus the stock of Lexmark-it has to buy Lexmark or alternatively, it needs the yen to get strong to undercut the dumping of printers."
Overall, splitting will allow the two companies to compete more effectively in a technology market, Re/code.net stated.
Separately, Credit Suisse this morning initiated coverage of HP Inc. with an "outperform" rating and a $19 price target.
"We believe that as we gain visibility on printing supplies, the company can attain modest low single digit operating income growth," analysts said.
The firm also cited "significant cash return," for its bullish outlook.
Separately, TheStreet Ratings team rates HEWLETT-PACKARD CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate HEWLETT-PACKARD CO (HPQ) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HEWLETT-PACKARD CO's earnings per share declined by 9.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, HEWLETT-PACKARD CO's EPS of $2.62 remained unchanged from the prior years' EPS of $2.62. This year, the market expects an improvement in earnings ($3.63 versus $2.62).
- The revenue fell significantly faster than the industry average of 25.3%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- HPQ's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that HPQ's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.67 is low and demonstrates weak liquidity.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, HEWLETT-PACKARD CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: HPQ








