DELL Dell Inc. (MM)

Hewlett-Packard Company (HPQ) has introduced 11 new notebook models with AMD’s latest VISION Technology targeting individual consumers, small and midsize businesses (SMBs) and large corporations. The new models are both affordable and performance oriented.

The new note books comprise Advanced Micro Devices Inc.’s (AMD) A-series Accelerated Processing Units (APUs) that combine revolutionary CPU cores and powerful graphics to deliver superior processing speeds and enhanced visual presentation.

The 11 new notebook models are namely, the HP Pavilion dv-series (Pavilion dv4, dv6 and dv7), the HP Pavilion g-series (Pavilion g4, g6 and g7), the HP ProBook b-series (HP ProBook 6465b and ProBook 6565b) and the HP ProBook s-series (ProBook 4535s, 4435s and 4436s)

Now coming to pricing and availability, HP Pavilion dv6 and Pavilion dv7 starts at $599.99 and $699.99, respectively, and are expected to be available in July. The HP Pavilion g4, Pavilion g6 and Pavilion g7 starts at $449.99, $498 and $499, respectively, and these are also expected to be available from July. 

Moreover, the HP ProBook b-series and HP ProBook s-series has the base price starting from $679 and $519, respectively. Both of them are expected to hit the markets on June 27.

HP has established itself as a leader in notebook sales and through its collaboration with AMD, it is in a better position to develop customized and affordable notebooks that are equipped with fast computing capabilities, enhanced performance and cutting-edge digital graphics. More importantly, they are priced aggressively, so will be able to compete with tablets from Apple Inc (AAPL) and others.

Despite the company’s market position and compelling product line, we remain cautious about future growth, especially as competition from other big technology players, such as Apple, Acer, Microsoft Corp (MSFT), and Dell Inc (DELL) heats up. The increasing competition is expected to impact pricing in the market, thus moderating profitability to some extent.

However, a lowered revenue outlook, reflecting moderate demand for desktop PCs, manufacturing problems in Japan and the growing popularity of tablets, which is eating into its core computing market are headwinds for the stock. Moreover, HP lags its peer Apple in the tablet vertical.

We remain Neutral over the long term (6-12 months) based on the belief that the company’s shares are fairly valued at current levels

Currently, Hewlett Packard has a Zacks #4 Rank, implying a short-term Sell rating.

 
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