Hewlett Packard Co shares fell 6 percent on Tuesday after Goldman Sachs downgraded them to “sell,” warning that investors may be overestimating the company’s chances of a successful turnaround while it grapples with its declining PC and printing business.<\/p>\n
HP, in the midst of a restructuring that Chief Executive Meg Whitman has said will take years, is also struggling with intense competition in its servers and storage hardware division, the investment bank said in a research note.<\/p>\n
Coupled with the need to re-invest any savings from its current overhaul in research and business development, its earnings may continue to come under pressure this fiscal year and beyond, Goldman said.<\/p>\n
Wall Street’s “consensus is attributing an unreasonably high probability to the turnaround’s success and incorrectly assuming fundamentals have already bottomed,” it wrote.<\/p>\n
“In contrast, we believe EPS expectations could face downward revisions in coming quarters.”<\/p>\n
HP, the world’s largest PC maker, has struggled with a fundamental erosion of demand for computers and printing supplies such as ink cartridges as consumers shift to mobile devices.<\/p>\n
Whitman is pushing the company to re-focus on enterprise services, but there it goes up against heavy-hitters like IBM , EMC Corp , Dell Inc and other IT providers.<\/p>\n
Shares of HP, which gained more than 60 percent in 2013, traded at $21.85 at mid-day, down 6.3 percent.<\/p>\n
Hewlett Packard plunges to nine-year low<\/strong><\/a><\/p>\n Hewlett Packard layoffs to total 29,000<\/strong><\/a><\/p>\n