* Hewlett-Packard upgrade details -- to Overweight at Barclays; tgt raised to $38
Barclays upgraded HPQ to Overweight from Equal Weight and raises their tgt to $38 from $33. First, they believe HP could gain share for several quarters in x86 servers at the expense of IBM/Lenovo, which could also help support sales of 3PAR storage gear. Second, while outsourcing is a concern, execution could improve in maintenance (Technology Services) and remains solid in printing and in PCs. Third, free cash flow has recovered nicely and the co seems well positioned for growing buybacks and dividends as it returns "at least" 50% of free cash flow to shareholders. They raise estimates modestly but their FY15 figures could still be conservative.
* Cisco Systems downgrade details -- to Equal Weight at Barclays; tgt lowered to $23
Barclays downgraded CSCO to Equal Weight from Overweight and lowers their tgt to $23 from $25; they believe uneven demand trends, secular headwinds, and a lack of major catalysts could keep shares range-bound over the next year. They acknowledge that expectations are low and valuation appears attractive relative to peers and Cisco's dividend yield should help support shares in the low $20 range. However, material upside to estimates does not seem likely at this point and it is also unlikely for the shares to re-rate higher until it becomes clear that the company can successfully execute on its major product transitions and fully participate in Cloud and software defined networking (SDN).