UPDATE: J.P. Morgan Downgrades Hewlett-Packard to Neutral (HPQ)

J.P. Morgan is out with its report today on Hewlett-Packard HPQ, downgrading HPQ from Overweight to Neutral. In a note to clients, J.P. Morgan writes, "We are downgrading HP to Neutral from Overweight and removing the stock from the Analyst Focus List. Our revised Dec 11 price target is $42 versus $55 previously. F2Q11 results beat expectations, but the revised outlook for F3Q and F2011 is a major disappointment. In our view, investors had braced for PCs worsening and potential supply chain issues in Japan, but the elongating overhaul process in services stands to weigh on investor sentiment beyond the near term. When we had lowered our estimates on HP this past Friday, we had thought the last reset to numbers was near, but given the services struggles, we think that yesterday's reset may not be the last." At the time of posting, shares of HPQ were trading pre-market at $36.82, down 0.24% from Tuesday's close.