Back to top

Analyst Blog

Hewlett-Packard Company’s (HPQ - Analyst Report) long-standing ties with the gigantic FMCG (fast moving consumer goods) dealer Procter & Gamble Co. (PG - Analyst Report) were further strengthened with the latest information technology (IT) service deal between the two. Yesterday, H-P announced that it will be extending its application service support to help P&G manage supply chain operations efficiently. The financial details of the multi-year deal were kept confidential.

Per the deal, H-P will offer its Applications Development Services and Applications Management Services. These solutions will support P&G’s mission critical business applications, which help the company in research and development, inventory management, enterprise resource planning and business intelligence.

With H-P’s application services, P&G can access its various databases on consumer preferences, suppliers, retailers and distributors. This will help the company to formulate more effective product plans and refine its go-to-market strategy.

In June, P&G leveraged H-P’s 3PAR storage, networking, cloud and converged infrastructure solutions to convert its private cloud to a hybrid cloud, which will allow greater flexibility to cope with changing market dynamics.

The back-to-back deals prove the efficacy of H-P’s services and offerings, which enable P&G to provide constant and uninterrupted IT services. It lends the FMCG giant greater flexibility to cope with changing market dynamics and thus keeps it ahead of its peers.

H-P has been dealing with the consumer goods industry for years. No doubt the tech behemoth has gained extensive experience in market dynamics, which has benefited its sizeable customer base time after time. Rapid product innovation, a good understanding of changing demands, supply chain optimization, customer satisfaction and efficient customer feedback are critical to survival in the fast changing consumer goods market.

H-P’s technological innovations have given it the expertise to take care of these key issues. Close association with P&G could act as a catalyst to attract more deals from the sector.

Despite consistent wins and new product launches, we have a bearish view on H-P due to weak fundamentals as a result of lackluster PC, Printer and Services demand.

The lack of positive catalysts resulted in significant downward estimate revisions, on the basis of which H-P has a Zacks #5 Rank, implying a short-term Strong Sell rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%