Shares of PC giant Hewlett-Packard (NYSE:HPQ) were under heavy pressure today, down by as much as 6%, following an analyst downgrade from Goldman Sachs. Analyst Bill Shope is cutting his estimates on the broader PC sector, with unit shipments expected to come in weak during the first quarter.

After shares bottomed in November, HP has proceeded to more than double over the past six months as investors bet that the worst is behind HP. Shope, on the other hand, does not believe that HP is out of the woods yet, as the company's turnaround story is still very much a work in progress.

The analyst not only points to deteriorating unit shipment volumes but also to continued pricing pressure that most PC OEMs face as they aggressively compete against each other. Most PC vendors are also expanding into tablet form factors, which generally carry lower prices, further adding downward pressure.

HP just reentered the consumer tablet fray with its Slate 7, which runs Google Android. While that low-end offering carries just a $169 price point, it's certainly not positioned as a laptop replacement and is unlikely to cannibalize HP's PC sales. That's not to say that other tablets won't cannibalize PCs in general, though, with Shope expecting 40% cannibalization over the next two years.

Shope downgraded HP from neutral to sell and assigned the company a $16 price target. He notes that CEO Meg Whitman is embarking on a multiyear turnaround effort, but the rest of Wall Street is modeling for higher chances of success on the assumption that the business has already bottomed out.

That could lead to downward revisions in Street estimates in the next few quarters, which can be a painful process in itself. Even if HP benefits from its recent restructuring initiatives, the analyst sees those gains being offset by incremental weakness in the company's core businesses.

HP may not have bottomed just yet.

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