Wednesday, December 12, 2007

Hewlett-Packard (NYSE:HPQ) : We would buy the shares - Goldman Sachs

- Goldman Sachs is positive on Hewlett-Packard (NYSE:HPQ) saying that while the analyst meeting did not provide a near-term catalyst for the stock, but they would buy the shares as they believe the company's ability to grow earnings at a multiple of revenue growth and its upside opportunities should drive the stock to firm's $59 12-month price target.

While extracting costs remains a key part of the HP story, the company is intensifying its focus on improving its go-to-market capability by investing heavily in its direct salesforce and channel programs, which GSCO thinks will allow HP to show consistent revenue growth even in a softer
enterprise spending environment. They are making small adjustments to their out-year estimates, raising revenue slightly, offset by a higher tax and a more conservative share buyback, leaving EPS estimate unchanged at $3.85 for FY2009. FY2008E EPS of $3.40 is also unchanged.

HP remains on the Conviction Buy List.

Notablecalls: Expect the stock to see some early buy interest as GSCO is not alone with the optimitic comments this AM.

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