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Ahead of the Bell: Hewlett-Packard downgraded

NEW YORK (AP) -- An analyst lowered his rating and price target for Hewlett-Packard Co. on Thursday, saying the computer and printer maker's potential retargeting of the smartphone and tablet markets could be risky investments.

Shares of HP fell 20 cents to $16.91 in premarket trading. Its shares had fallen to a 52-week low of $16.23 on Wednesday.

Peter Misek of Jefferies says HP failed with its acquisition of Palm and then dealt with goodwill and inventory write-offs of $3.3 billion. While the analyst says the company's possible refocus on the tablet and smartphone markets makes sense strategically, he still feels it is a high risk move.

"On top of adding costs and working capital burdens to an already stressed balance sheet, there could be additional write-offs," Misek wrote in a client note.

The analyst says HP is also facing some challenges in its personal computer, services and printer businesses, which include slowing demand for personal computers and excess inventories in China and Europe.

Earlier this month HP announced that it planned to cut about 2,000 more jobs than it had previously announced as CEO Meg Whitman tries to turn the company around. The Palo Alto, Calif., company said in a regulatory filing that said it would eliminate 29,000 jobs by October 2014, up from the 27,000 cuts it announced in May when HP employed about 350,000 people.

Misek cut HP's rating to "Underperform" from "Hold" and reduced its price target to $14 from $17.