Citi Reiterates Buy As HPQ Prepares For Another Tough Quarter

Citi is reiterating its Buy rating and $65 price target on Hewlett-Packard Co. HPQ as the company prepares for another tough quarter. Says Citi, in the report, “HPQ shares are trading down 5% in after-hours trading due to press reports of a leaked memo from CEO Leo Apotheker to top executives warning of “another tough quarter” in 3FQ (July). The memo purportedly urges executives to avoid “profitless revenue or any discretionary expenditures” during the July qtr. This comes on the heels of a Jan qtr in which revenue was $700M (2%) below our est/consensus and an Apr qtr in which consensus revenue and non-GAAP EPS guidance were cut from $32.6B and $1.25, respectively, to $31.4-31.6B and $1.19-1.21.” HPQ closed at $39.80 yesterday.