Zacks_Analysts' Blog : Hewlett-Packard in Good Shape - Analyst Blog

Leading computer maker Hewlett-Packard Company (HPQ) recently introduced a range of environment-friendly desktops, notebooks and displays targeted at business users.

The one that appears to show the most promise is the HP Compaq 8000f Elite Ultra Slim Desktop, which H-P claims to be the first Windows-based desktop PC that does not generate brominated flame retardants (BFRs) and polyvinyl chloride (PVC) from the mouse.

The consistent roll out of quality new products at regular intervals is keeping H-P ahead of competitors such as Dell Inc. (DELL) and helping H-P maintain its leading marketshare. The company's computer pipeline strength is partly responsible for its robust earnings profile.

The Zacks Consensus Estimate on Hewlett-Packard for fiscal year 2010 is $4.35, an increase of 13% from fiscal 2009. Estimates appear to be modestly up, with two of its 31 analysts covering the stock raising estimates in the last 30 days. This is helping the stock maintian its Zacks # 2 Rank, which translates to a short-term 'buy' rating on the stock. Long term, we continue to rate the stock 'Neutral'.



In terms of earnigns surprises, the company does not have much of a history, in either direction. It had modest positive surprises in the last two quarters, with the four-quarter average of positive 1%. This means that, on average, H-P has come ahead of the Zacks Consensus by 1% over the last four quarters. For the upcoming quarter, the Zacks Consensus Estimate is $1.05. Although management expects revenues to decline in the first quarter of 2010, it is positive about the full-year 2010 outlook.