5 Tech Stock Ideas As Analysts Lower Target Price
When analysts lower the target price of companies, value investors could view this as a starting point for under-appreciated investing ideas. Companies that have a worsening outlook and a business model that is broken should be avoided. Conversely, a business whose fortunes are weak right now, but are on the right path of turning itself around should interest investors. If the discount to intrinsic value is large enough, and investors have a time horizon of at least a year or longer, which companies are ones to buy? [Related list: 4 Tech Buys and a Sell from Jim Cramer]
The technology stocks having a lower price target are listed below:
1) Hewlett-Packard Company (HPQ) continues to be a wait and see. The discount on shares shrunk as its competitor, Dell (DELL), announced a deal that would take Dell private. HP recently re-hired a VP of EDS to be its Head of Enterprise Services. Talk that the company is studying a break-up helped push shares up 24.4% in the last three months.
A break-up of the company is a recurring story that is unlikely to happen. HP’s printing and desktop computing business is declining, but HP can turn those units around. A focus on enterprise software sales will also take time.
2) Corning Inc. (GLW) faced a 2.32% decline in its target price. Corning is healthily growing its sales in gorilla glass, but its shares are being weighed down by weak LCD TV sales and solar panels. Gorilla glass will continue to grow, but until the material is used in greater quantities for larger mobile devices like tablets, Corning shares will remain at a discount.
Interactive chart: Use Kapitall's tools to compare changes in average analyst ratings over the past two years.