Capstone Investments analyst Shebly Seyrafi this morning launched coverage of Hewlett-Packard (HPQ) with a Buy rating and $53 price target.
Seyrafi asserts in a research note that the stock is trading at a 25% discount to their fundamental value, due in part to concerns about how the company will be run under new CEO Leo Apotheker. But he contends that “the current discount is too severe for a company with HPQ’s characteristics,” which include being the world’s largest IT company, generating strong free cash flow, paying a small dividend which could increase, holding a dominant position in printers, and maintaining a market share lead in PCs and servers.
HPQ is down 20 cents, at $47.01.
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