In a research note released Friday, UBS analyst Steven Milunovich commented on Hewlett-Packard's (NASDAQ: HPQ) “near-term upside,” as well as its “long-term challenges.”
The firm discussed HP's Discover user conference net week and said that the reason why it analyzed the stock was in anticipation of this conference.
Milunovich continued by stating that it believes that Hewlett-Packard will “likely” make or beat near-term estimates, driven by fundamental recovery and additional restructuring.
Milunovich commented on CEO Meg Whitman, “Meg Whitman has done a better job than we expected with improvements in focus, accountability, and culture.”
In addition, the firm stated that its full year 2015 estimate is above consensus estimates. The estimate is based on one percent revenue growth and cost savings.
Hewlett-Packard will also have $8 billion in free cash flow over the next two years and this will allow the company to accelerate its share repurchase program and grow its earnings per share.
Finally in regards to competition, the firm stated that it prefers Hewlett-Packard over IBM. This decision was primarily made due to HP's ability to make numbers in part due to further restructuring savings and share buyback plans.
Milunovich maintains a Neutral rating and a 12-month price target of $34.00.
Shares of Hewlett-Packard were relatively neutral on Friday and are up 20.8 percent year-to-date.
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