Brean Capital maintained a Buy rating on HPQ Pt $32
Brean Capital maintained a Buy rating on Hewlett-Packard (NYSE: HPQ) with a price target of $32.00. Analyst Ananda Baruah said execution issues in Enterprise and CEO Whitman's more tempered expectations regarding FY14 revenue are not materially incremental to his thesis, and he pointed to the company's healed balance sheet.
"We maintain our thesis that HP remains undervalued on FCF generation while acknowledging their preliminary comments regarding ’14 revenue (down in ’14) and cost savings potential (while saying material, leaving the amount undefined) likely will leave investors guessing ahead of the Oct 9th Analyst Day. We believe the path to $32 likely gets less linear and a tad bumpier, as ’14 EPS HP growth may come more from buyback ($0.10+) and lower Interest Expense ($0.04 - $0.06), but ultimately works at this FCF valuation and ahead of material capital return (at least 5% of Cap repurchased in ’14 and an increase in the 2.2% dividend yield)," said Baruah.
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