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Hewlett-Packard Downgraded
An analyst cut his rating and price target for Hewlett-Packard Co. on Friday, saying he is concerned about the way tablets and smartphones could hurt some of the technology company’s businesses.
Peter Misek of Jefferies & Co. said that tablets are likely to hurt HP’s personal computer segment."While consensus thinks Windows 8 will boost personal computers, we think it will accelerate tablet cannibalization as the operating system focuses on touch," he wrote in a client note.
Misek also believes that smartphones are now used by enough consumers — and tablets to a lesser degree — that it is lowering printing demand.
Aside from pressures from tablets and smartphones, Misek says uncertainty in Europe seems to be causing a slowdown in information technology spending. This is a concern for HP, as it gets one-third of its revenue from Europe, the Middle East and Africa, he explained.
"We believe that information technology budgets are up 3 percent to 5 percent for 2012 but that corporate information technology departments are taking a cautious outlook, especially as we approach the Greek elections," Misek said.
The analyst lowered HP to "Hold" from "Buy" and reduced his price target to $23 from $30.HP shares closed at $22.68 per share on Thursday. They fell to a 52-week low of $20.57 on May 23 and traded as high as $37.70 late last July.An email seeking comment from HP was sent before business hours but was not immediately returned.
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