Global Technology| July 22, 2015 LLoowweerriinngg HHPP EEssttiimmaatteess Lowering Estimates for Hewlett-Packard (HPQ), Remain OW with $41 PT, down from $42 While HP has heavily invested in the server and storage product portfolio over the last several years, including refreshing the ProLiant and Apollo server lines, introducing HP Moonshot, and driving continued adoption of converged solutions and 3PAR, we lower server and storage revenue estimates to normal or below normal seasonality in each of the next four quarters to reflect broader market weakness in both the traditional enterprise and cloud. As a result, our FY15 EPS decreases by $0.05 to $3.55 and FY16 EPS by $0.11 to $3.68. While weak enterprise revenue, potential for further one-time separation cost announcements, and overhang from M&A speculation (e.g., Bloomberg June 3, 2015) could limit valuation upside near-term, the pending separation remains a catalyst for unlocking value, which keeps us Overweight the name. On the back of modest estimate cuts, our PT falls to $41, from $42, reflecting 11x FY16 EPS of $3.68, in-line with other growth- challenged enterprise hardware stocks in our coverage. 21