ISI Comments on Potential Hewlett-Packard Merger

In a research report published earlier today, ISI commented on the recent press reports indicating that Hewlett-Packard Company (NYSE: HPQ) is getting ready to merge its PC and printer businesses.

According to ISI, “In our view, PSG under Todd Bradley has been HPQ's best performing division (e.g., market share gains, margin expansion, navigation through the distraction of a possible divestiture, etc.) and Bradley is well regarded in the investment community. If the reports are true and a reorganization is executed successfully, we believe this structural change at HPQ is a positive move aimed at value creation (e.g., economies-of-scale combining PSG/IPG, synergies from redundant opex between PSG/IPG, etc.) and is indicative of a "new and improved" board of directors.”

ISI maintains its Buy rating and $34 PT on Hewlett-Packard, which closed yesterday at $24.12.