Pacific Crest’s Brent Bracelin this morning raised his rating on shares of Hewlett-Packard (HPQ) to Sector Perform from Underperform, writing that the “risk/reward profile balanced after big estimate cuts” following the company’s fiscal Q4 report a week ago Monday.
Bracelin’s is the second upgrade this week, following that of RBC Capital’s Amit Daryanani on Monday.
Bracelin thinks that “new leadership could help drive a multi-quarter turnaround, with a potential return to profit and revenue growth in F2013,” referring to newly installed CEO Meg Whitman.
HP still has a central role in IT, notes Bracelin, as a survey of chief information officers showed 49% plan to increase the money they spend on HP’s wares in 2012 as a percentage of their budgets.
Still, the stock will probably be stuck between $24 and $33 till there’s greater visibility on the turnaround, writes Bracelin.
HP shares today are up 26 cents, or 1%, at $28.21.
As I mentioned earlier, Standard & Poor’s also seems to believe there’s less risk here, as it removed HP’s debt from its “Credit Watch” service this morning, and revised the outlook to “stable” from “negative,” even though it lowered HP’s debt rating.
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