Analysts Scott D. Craig and Samuel Park raised their price target on HP to $39 from its previous $29. The analysts based their upgrade on HP's "stable-to-slightly increasing EPS revisions" during the company's restructuring, strong FCF generation, and its "commitment to shareholder returns of 50% of FCF in dividend and buyback." Poor investor sentiment and HP's ability to close its P/E gap on peers such as IBM (IBM) and Xerox (XRX) also contributed.
The analysts predict earnings per share for fiscal 2014 and 2015 between $3.66 and $3.84 a share, compared to Wall Street estimates of between $3.66 and $3.76 per share.
The upgrade comes a day after HP announced its re-entry into the smartphone market with two new "voice tablets" destined for India.
TheStreet Ratings team rates HEWLETT-PACKARD CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEWLETT-PACKARD CO (HPQ) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."