From the intel thread:
And Lehman Bros. upped Dow component Hewlett-Packard (NYSE:HPQ - News) to an "overweight" rating from an "equal-weight" thanks to higher-than-expected revenue growth in its printing business and in PCs. Lehman also feels that evidence of a pickup in corporate spending is emerging.
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Lehman/Hewlett-Packard -2: Keeps Target At $18 A Share
Updated: Monday, October 28, 2002 08:34 AM ET Printer-friendly version
LONDON -(Dow Jones)- Lehman Brothers has upgraded Hewlett-Packard (HPQ, news) to overweight from equalweight, keeping the price target at $18 a share, a spokesperson confirmed Monday.
The move follows August's upgrade of the stock to equalweight.
Lehman analyst Dan Niles believes the fourth quarter (October) is "solid with printing showing higher-than-expected revenue growth (13% quarter on quarter) and margins (16%)."
Niles reckons PCs are also growing revenues and margins while finally maintaining market share, offsetting continued weakness in UNIX servers, and the services business is on track with the business pipeline growing.
Hewlett-Packard's fortunes have improved due to a pick up in U.S. corporate spending, as shown in Bureau of Economic Analysis data, Niles said in a research note.
Business investment has increased for the first time in the U.S. since the first quarter of 2001 and an increase in corporate profits will boost information technology spending, Lehman said.
Niles believes IT spending will be up in the low single digits next year with the rest of the world following the lead of the U.S. by mid-year.
Lehman is sticking to its total revenue and earnings per share forecasts for HP, but has adjusted its segment profit assumptions, with printers and personal computers better and Enterprise Systems Group worse.
Hewlett-Packard shares closed in New York Friday at $14.62.
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