Hewlett-Packard: Color on Investor Summit
- Needham notes yesterday afternoon, as part of the HP Discover 2014 event in Las Vegas, HPQ hosted multiple Q&A sessions with the sell-side and various executives, division heads, and Board members. While no new financial information was provided (HP plans to do so at the fall analyst day), the event did serve to clarify/reiterate certain targets previously communicated. In their opinion, the stock already reflects comfort with current projections, and it is time for real rev and earnings growth (driven by more than repurchases) to materialize.
- Brean Capital reiterates their Buy rating and $40 TP, following yesterday's IR Summit held in conjunction with HPQ's annual Discover event in Las Vegas. They attended Q&A sessions with CEO Meg Whitman, CFO Cathie Lesjak, and several other key executives. We continue to believe upside exists to HPQ's '14 FCF guidance of $6.0-$6.5B (they estimate $7.2B -- yet they believe HPQ can deliver as much as $8B in '14 FCF) -- which underpins our stock buyback upside scenario of up to $3B in '14, vs. HPQ implied guidance of ~$2B. Their FCF upside conviction is supported by a firmer PC environment (driven by XP-related migration, as well as pent-up Commercial refresh demand) which was reinforced by their firmer Taiwan ODM work for May (6/11 note).
- Stifel notes yesterday HP hosted an IR Event in conjunction with its HP Discover end user conference. While they are more positive on HP's overall portfolio strategy / direction / execution, they retain their Hold and believe investors will be gauging a sentiment transition away from a balance sheet restructuring story to top- / bottom-line upside drivers. The event included several open Q&A sessions with HP executives, from which they summarize the key takeaways and highlight some HDD vs. Flash takeaways (also note HP's Memristor plans), thoughts on CommVault (CVLT) (via conversation with Veeam), and HP's Moonshot strategy (ARMH-based chassis in 2H2014).
- HPQ has continued to make solid progress on its turnaround over the last year. While much of the recent improvement has been internally controlled (e.g., execution improvements, cost cuts, etc.), they believe the next phase of the recovery could prove more challenging as HPQ needs to overcome secular and competitive headwinds across most of its business units. In their view, HPQ needs to demonstrate greater product innovation, top-line growth and margin improvement for further upside to shares. Please find below several of their key takeaways from the event as well as selected notes from presentations.
- Goldman upgraded the stock to Neutral.