JPMorgan's H-P upgrade: Valuation, cash flow growth praised

|By:, SA News Editor

JPMorgan's Mark Moskowitz, who has upgraded H-P (HPQ +2.4%) to Overweight and raised his PT to $35 from $30, thinks the IT giant is capable of generating annual free cash flow of more than $8B. That's a level well above H-P's FY14 (ends Oct. '14) FCF guidance range of $6B-$6.5B.

Moskowitz also sees room for further multiple expansion: He thinks H-P, which currently trades at 7.5x FY14E EPS, could eventually trade at 8.5x-9.5x earnings.

Shares are up 93% YTD, and not far removed from their 52-week high of $28.70.