H-P Hits the Heights

A Goldman Sachs upgrade lifts shares of the PC and printer company to a 52-week high.
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Shares of

Hewlett-Packard

(HPQ) - Get Report

hit a 52-week high Friday after an upgrade by a Wall Street analyst.

In a note to investors, Goldman Sachs analyst Laura Conigliaro said the Palo Alto, Calif., company is apt to see rising revenue and margins as all of its businesses continue to improve.

Conigliaro, whose firm has had an investment banking relationship with H-P in the past 12 months, raised her rating on H-P to outperform from in line.

Shares of H-P closed the regular session up 2.6%, or 79 cents, to $31.83, setting a new 52-week high.

Goldman's upgrade of H-P comes on the heels of Prudential's Wednesday upgrade, raising the company to an overweight rating.

In her note, Conigliaro added 10 cents to her fiscal 2006 profit estimates for H-P, projecting per-share earnings of $1.92 for the year. The analyst's new revenue forecast calls for a slightly higher $91.1 billion in sales, vs. a previously estimated $90.9 billion.

The average analyst expectation, according to Thomson First Call, calls for H-P to earn $1.82 on $90.8 billion in revenue for fiscal 2006.

H-P has several major businesses, including PCs, servers, printers and consulting. The improvements in H-P's various segments should give the company a fair value of $38, even without any multiple expansion, according to Conigliaro.

Investors have warmed to the H-P's turnaround, led by CEO Mark Hurd. Since Hurd joined the company in April 2005, H-P's stock has gained 44%.