Where is the bottom for Hewlett-Packard shares? According to the folks at Forbes on
Wednesday, HP’s stock sank $2.22, or 13%, to $14.91, a new nine-year low, after
the company slashed its guidance for the October 2013 fiscal year, and warned
in stark terms that the company’s turnaround has a long, long way to go. The
company now sees profits for the year of $3.40 to $3.60 a share; previous
consensus was for $4.18.
It would be an understatement to say that the analysts who
gathered for the company’s investor event yesterday walked away pissed off. .
At least five analysts cut price targets for the company this morning; and I am
sure that’s not all of them. While the stock trades for a paltry 4x the
mid-point of HP’s EPS target for FY 2013, it is hard to think of the company as
a bargain when revenue is shrinking and CEO Meg Whitman is warning of a long,
tough turnaround period.
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