Hewlett-Packard upgraded at Credit Suisse as printer business bottoms, PC sales look up

Hewlett-Packard upgraded by Credit Suisse

NEW YORK — Credit Suisse upgraded Hewlett-Packard Co. on Tuesday, calling a bottom to its printer business and pointing out improving demand for computer hardware.

In a client note, Credit Suisse analyst Bill Shope upgraded the stock to “outperform,” from “neutral.”

Shope said his previous rating was based on concerns over the cyclical downturn in the printing business, brought on by tighter information technology budgets during the recession. Printer ink has been one of HP’s most lucrative businesses for years.

Shope said the division is likely through the worst. And demand for personal computers — which make up nearly a third of HP’s business — appears to be improving.

On Tuesday, Intel Corp. CEO Paul Otellini said the worldwide computer market is pulling out of its slump. “I think that the market is poised for a resurgence,” he said.

Given those trends, Shope hiked his earnings and sales estimates for HP’s next fiscal year, which begins for the company in November. He expects a profit of $4.26 per share on sales of $118.3 billion, up from a previous estimate of $4.03 a share and $117.1 billion in sales. The average forecast in a Thomson Reuters poll was $4.23 per share on sales of $117.9 billion.

HP shares rose 73 cents, or 1.6 percent, to $47.08 in afternoon trading.