Even as H-P (HPQ +15.6%) shares enjoy another big rally in the wake of last night’s quarterly...

Even as H-P (HPQ +15.6%) shares enjoy another big rally in the wake of last night’s quarterly results, Topeka Capital's Brian White sees only a "sugar high... not a sustainable trend." While the upside excites bulls in the short-term, the fact remains that H-P’s profits and sales have dropped for seven quarters in a row, he says, maintaining his Sell rating and $12 price target.

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Comments (9)
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    I think that's an irrational price target. Even if HP's EPS dropped to $3.00 (well below the raised guidance of $3.50-$3.60), a PT of 12 would equate to a P/E of 4, basically pricing the company as if bankruptcy is an imminent concern.
    23 May 2013, 03:06 PM Reply Like
  • Mike Arnold
    , contributor
    Comments (2366) | Send Message
    Yeah, and they only decreased their net debt position by $1.8 billion. They might even have net cash by the end of the year. Then if prices stayed at $12/share, HPQ could take itself private in like 4-5 years by using its free cash flow to buy shares, assuming the core businesses remain materially intact and the fundamentals don't deteriorate to a grinding halt.


    $12 is too low, $35 may be too high. HPQ is an 'avoid' at $25/share, in my opinion.
    24 May 2013, 12:07 AM Reply Like
  • Panoplos
    , contributor
    Comments (844) | Send Message
    HP lost market share to Lenovo. In fact, this is a trend of late, and it looks like Lenovo are going to overtake HP in PC sales. As Topeka states, the company's sales and profits have plummeted and will continue to do so as the PC market shrinks where HP plays strongest.


    Hot run up in a poor stock. Short is a good play after run up to close.
    23 May 2013, 03:07 PM Reply Like
  • mpmassey
    , contributor
    Comments (846) | Send Message
    HP wants Lenovo to take them over in PC sales. Same as Dell does. They do not want a high % of their revenues coming from PC sales.


    The analyst is being hard-headed as he watches HPQ more than double from it's $11 low. I wonder how he explains that to all who listened to him and missed the huge move. It will never seen $12.
    23 May 2013, 03:11 PM Reply Like
  • Zeus2012
    , contributor
    Comments (714) | Send Message
    Wasn't he the same knuckle head that put a $1000 price target on AAPL last September at the height of the bubble.


    No wonder sell side analysts get looked down upon.
    23 May 2013, 03:28 PM Reply Like
  • rq412
    , contributor
    Comments (111) | Send Message
    Well Topeka Capital's Brian White is clearly a moron.


    I have never met or heard of an accurate analyst, this just makes me want to buy HPQ


    how does this dope still have a job after suckering investors into thinking apple would go to $1k? Not even weathermen are wrong more often than idiots like him
    23 May 2013, 03:33 PM Reply Like
  • warrenrial
    , contributor
    Comments (550) | Send Message
    Brian, Please follow the instructions on the bottle.
    23 May 2013, 03:41 PM Reply Like
  • TwistTie
    , contributor
    Comments (2429) | Send Message
    I don't know.


    There could be a stock split, a big dividend, or something.


    Hey, what about dividends?
    23 May 2013, 03:50 PM Reply Like
  • sl100
    , contributor
    Comments (112) | Send Message
    i think he is right about the company but may take time to play out, i posted below details on a different thread below, If you check the balance sheet and check the revenue growth you will see this is a value trap here. I am highlighting few points here
    -- debt 28B
    -- goodwill 31B this will basically be written off over time.
    -- revenue growth slowed in all segments. Most of the revenue comes from hardware and this everyone knows is commodity business. Not a leader in any other sector it is in.
    -- legacy pension and medical cost issues not going to go away any time soon.
    -- they are cutting cost to make number no real rev growth.
    -- cost cutting everywhere govts, private sectors & households so the hardware and software buisness is very unlikely to grow anytime soon.


    Better to wait around $15-18 is better entry point but always buy protection with options if buy the stock at these levels too risky. Do not go short here wait for the stock to settled down.
    23 May 2013, 08:25 PM Reply Like
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