HP: Attractive Entry Point For Investors

Analysts at Brean Murray initiate coverage of Hewlett-Packard Co HP with a "buy" rating. The target price for HP is set to $60. Brean Murray considers HP as an undervalued asset given “(1) its valuation (10x our FY10 EPS estimate), (2) our belief there is upside to Street EPS, and 3) our belief that both stronger-than-expected revenue and operating margins through 2H10 could drive EPS meaningfully above even our above-Street estimates.” The analysts also believe the “opportunity for a 2H10 ‘seasonal trade’ generally exists for technology vendors that would benefit from both 2H seasonal spending and a potential enterprise refresh, to which HP has material exposure.” Hewlett-Packard is likely to generate upside to H2 revenue estimates as “it gets its laser hardware supply more in line with true demand during the October quarter (4QFY10); HP has been “constrained” since the beginning of 2009, while we believe there is likely a good bit of “natural” share to regain, perhaps primarily in the distribution channel,” according to Brean Murray. More Analyst Ratings here