Here are some things going on this morning in your world of tech:
Shares of Hewlett-Packard (HPQ) are down $1, or 4.3%, at $22.31 in early trading as Goldman Sachs‘s hardware analyst Bill Shope goes on the warpath, cutting his view of technology overall to “Cautious” from Neutral, after deciding PC trends are worse than he’d expected.
On HP, Shope cut the stock to Sell from Neutral, with a $16 price target, writing that “sentiment has moved ahead of reality” in the Street’s enthusiasm for HP’s turnaround. Estimates may come down and a recovery in earnings power “will be muted through 2014,” he thinks. Shope also cut estimates for Dell (DELL).
Speaking of Dell, CEO Michael Dell sent a letter to employees yesterday, setting forth “a better understanding of our vision for the future.”
CNBC’s David Faber, in a huddle with Jim Cramer and Carl Quintanilla this morning, remarked on the note, saying “Interesting he’s trying to rally the troops. This is a distraction for Dell. One wonders if HP is taking market share from Dell.”
“I think Dell is also caught up in a worldwide slowdown for hardware, as is HP,” said Cramer.
Goldman’s Shope also stripped his “Conviction List” designation for Apple (AAPL) stock, though he maintains a Buy rating on the shares, cutting his price target to $575 from $660, after cutting estimates for this calendar year.
Apple shares are up $4.23, or 1%, at $433.14, this morning, while Dell stock is down a penny at $14.29.
“We continue to believe Apple�s platform-centric business model makes its cash flows and installed base loyalty far more resilient,” writes Shope, but “we believe the stock’s outperformances over the next 12 months willb e more closely tied to whether or not the company’s next product cycles can reinvigorate market share momentum.”
Speaking of Apple, Jefferies & Co.’s Peter Misek this morning writes that hhis “in-depth analysis” of smartphones, including incomes and “ecosystem strength,” suggest that growth is coming from phones below $200, wholesale, and that an iPhone at $350 to $400 is too expensive. He thinks there’s risk to Apple’s estimates for next year. Misek reiterates a Hold rating and a $420 price target on Apple.
Speaking of smartphones, Raymond James’s Tavis McCourt raised his rating this morning on shares of Qualcomm (QCOM) to Strong Buy from Outperform, and raises his price target to $83 from $80, writing that investors are overly concerned with how much competition the company faces in chips for “long-term evolution,” or LTE, wireless. While growth will slow the next 2 years for Qualcomm, nevertheless, “Qualcomm will maintain a meaningful advantage on high end smartphones as it moves to 20 nm (competition at 28nm in 2014) and continues to lead the world in SoC integration,” writes McCourt.
Qualcomm stock is up 38 cents, or 0.6%, at $66.38.
Google (GOOG) gets a thumbs up today from UBS’s Eric Sheridan, with an initiation of coverage at Buy, with a $945 price target, and Sheridan adds the stock to the “U.S. Key Call list,” writing that the company is “best positioned for long-term secular growth based on the UBS Internet prism.”
“We believe Google�s current investments in 10x opportunities provide call-option-like return potential,” writes Sheridan.
Google stock is up $5.73, or 0.7%, at $806.92.
Shares of Verizon Communications (VZ) are up 28 cents, or 0.6%, at $49.50, amidst more rumors of a possible unwinding of its wireless joint venture with Vodafone (VOD). The Financial Times‘s Alphaville‘s Bryce Elder wrote this morning that Verizon is at work with AT&T (T) on a deal to collectively buy out Vodafone’s stake at a 40% premium to Vodafone’s current price, citing unnamed sources “usually reliable.”
Vodafone shares are up $1.49, or 5.3%, at $29.83.
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