H-P With Slowing Revenue Risks

Tags: hpq
21 Nov 2:10am
Posted by ZacksResearch
0 Comments
Read original blog entry

Following strong results for its third quarter of fiscal year 2008, Hewlett-Packard Company (HPQ) has announced better-than-expected preliminary results for the fourth quarter and has guided for a robust fiscal 2009. However, we remain concerned that several factors will cause revenue to slow in the future.

First, HPQ's acquisition of EDS adds a slower-growth company to its revenue base. Next, the global economy is slowing, and although Hewlett-Packard Co. has benefited from 68.0% of revenue coming from overseas, this could hurt going into next year.

We therefore maintain our Hold recommendation on HPQ shares with a six-month target price of $34.50. Hewlett-Packard is currently trading at a P/E multiple of 8.3x our 2009 EPS estimate of $3.99. Our six-month target represents a P/E multiple of 8.6x our fiscal 2009 EPS estimate.

Anita Mohata contributed to this report.

Read the full analyst report on HPQ.



Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Equity Research. See all today’s Analyst Blog entries on Zacks.com.

Comments

Back to top

Post comment

Back to top

Post a comment

Please login to post a comment

About

ZacksResearch

Zacks Investment Research is one of the most highly regarded firms in the investment industry. Our firm has long believed that that quantitative models (like the Zacks Rank) can predict stock prices more accurately than individual analysts. However we also recognize that models are most effective when they are employed by analysts who have deep fundamental knowledge of the company and its industry. Consequently Zacks Equity Research combines Zacks quantitative models with the insight provided by an experienced team of 50 analysts to create superior long term stock recommendations. Discover all their timely insight and recommendations daily on Zacks.com.

Recent Entries