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Hewlett-Packard PC Worries Overdone- Analyst

In a research note released Monday, Wells Fargo (NYSE: WFC) research analysts believe that fears over the decline in the PC industry don’t affect Hewlett-Packard (NYSE: HPQ) as much as the street thinks.

Wells Fargo met with HP executives and now believe that PC sales account for only about 10 percent of the company’s profits. Wells Fargo kept an Outperform rating on the shares and believes that operating earnings will rise in the 2014 fiscal year.

A lot has been said over the past year about the sharp drop in PC shipments. Gartner reported that second-quarter PC shipments fell another 10.9 percent to 76 million. Year over year declines of 1.4 percent were reported in the United States.

As less than stellar PC shipment data surfaced, many believed that companies like HP, Dell (NASDAQ: DELL), and Intel (NYSE: INTC) would see the largest impact but as these companies have diversified into the mobile and enterprise markets, PC manufacturing and sales has become a less significant portion of their revenue.

Hewlett-Packard is one of 2013’s strongest performers with shares up more than 45 percent.

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Disclosure: At the time of this writing, the author had no position in the company mentioned.


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