Hewlett-Packard (HPQ): Citi Raises Target, Estimates

Citi maintains BUY on Hewlett-Packard (HPQ) and boosts target and estimates following HP’s quarterly conference call. Target from $64 to $71. EPS raised in line with guidance.

Citi was encouraged by a recovery in Printers and “reasonably-solid” commentary on Demand from CEO Mark Hurd:

Segment-level revenue and margin trends were generally seasonal, with the exception of x86 servers where CEO Mark Hurd cited the loss of a few key deals. Printer unit growth bounced nicely from 1% yoy in 1FQ to 6% in 2FQ, suggesting that 1FQ marked the bottom on this important metric.

Hurd characterised U.S. demand as “spotty” but noted solid demand in storage, high-end servers, and printers, and characterised Europe as “strong across all divisions.” On linearity, Hurd cited a normal or slightly better-than-normal April relative to historical patterns.

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