Hewlett-Packard Added To Goldman Conviction Buy List

Goldman Sachs hardware analyst David Bailey this morning added Hewlett-Packard (HPQ) to the firm’s Conviction Buy List, replacing Emulex (ELX) . “Given our negative view on enterprise tech spending, particularly in the first half of 2009 when CIOs are likely to under spend already-soft IT budgets, we believe Hewlett-Packard should outperform on a relative and absolute basis due to the company’s earnings resiliency and diversity,” Bailey writes. He says the company’s earnings pre-announcement earlier this week “reaffirmed” his thesis that “the company’s diversity and cost-cutting abilities should allow it to show solid earnings despite deteriorating tech demand.” Bailey maintains his Buy rating on Emulex, but says he prefers HP as a larger cap and more defensive investment in the current environment. He does say that checks indicate that the fundamental story at Emulex “remains intact” and that valuation is “very ... (link)