Analysts cut price targets on HP, see slow turnaround

PALO ALTO, Calif., Thu Oct 4, 2012 – A slew of brokerages cut their price targets on Hewlett-Packard Co. stock, saying the weak economy will continue to weigh on the company that has been plagued by operating problems and slow growth in its computers and printers businesses.

HP warned of an unexpectedly steep earnings slide in 2013 on Wednesday, with revenue set to fall in every business division except software.

Shares of the company fell about 4 percent to $14.26 on Thursday morning. They fell 13 percent to a nine-year low on Wednesday.

Analysts expect the company’s revenue and margins to falter, increasing uncertainty about its recent strategic decisions which focus on transforming the former industry powerhouse into an enterprise computing corporation that can take on IBM and Dell Inc.

“HP’s assumption of turning around the enterprise services business within one-two years looks aggressive, given the significant revenue decline and margin deterioration expected in fiscal 2013,” BMO Capital Markets analyst Keith Bachman said.