Bank of America Reiterates Buy on Hewlett-Packard

Bank of America reiterated its Buy rating on Hewlett-Packard HPQ. In a research report published today, Bank of America states, "We believe one big investor pushback for Hewlett-Packard is that EPS has not been cut enough. We look at a number of scenarios for F2012 and conclude that bearish and conservative assumptions yield EPS of $4.80-4.90 versus ours/consensus of $5.30/5.37. An extremely bearish scenario yields EPS of ~$4.60, although this assumes no revenue growth and margin issues in all segments. While we think the stock would probably trade lower if any of the scenarios occurred, we estimate there is likely some valuation support at ~7-8x very trough-like EPS assumptions (stock price around mid-$30's). We believe execution is needed, especially in Services, before sentiment turns, which may take up to eight quarters – we remain buyers." At the moment, Bank of America has a price target of $44 on the company's stock. On Monday, Hewlett-Packard closed the day at $36.96. Its shares added 0.78% to their value in today's pre-market trading, however, to trade at $37.25.