Why Hewlett-Packard Company Popped Today

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Hewlett-Packard Company (NYSE: HPQ  ) climbed more than 2% today after J.P. Morgan upgraded the IT services specialist from neutral to overweight.

So what: Along with the upgrade, analyst Mark Moskowit boosted his price target to $35 (from $30), representing 30% worth of upside to yesterday's close. While value investors might be turned off by Hewlett-Packard's strong share-price action in 2013, Moskowit believes there's plenty of room to run given his view of continued PC stabilization and further free cash flow improvement.

Now what: J.P. Morgan expects HP to generate about $6 billion-$6.5 billion in 2014 free cash flow, but also said that $8 billion is a strong upside possibility. "While our revised 2014 PC growth forecast is not suggesting a major recovery in the making, we believe the potential of market conditions stabilizing after a year of meaningful deterioration could be enough of a catalyst to revive investor interest in PC-related stocks such as HP," noted J.P. Morgan. With Hewlett-Packard shares trading at a cheapish price-to-cash flow 4, betting on that bullishness might not be a bad idea. 

More great ways to get growth
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2768310, ~/Articles/ArticleHandler.aspx, 4/18/2014 8:26:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement