HP shares are dropping like a rock today, down nearly 6% so far, thanks to a big fat "sell" rating issued by Goldman Sachs.
HP's problems have not yet hit bottom, Goldman Sachs analysts warned in research note. They gave a target of $16 a share.
The stock had been trading in the mid-$20 range, climbing steadily after HP's better-than-expecting earnings in February, a $0.13 dividend issued on March 11 and its annual shareholder's meeting last month. At that meeting, several directors were in danger of being ousted but all were re-elected, some of them by the skin of their noses.
Meg Whitman also talked up new products and services that she believes will inject some growth back into the company. This includes HP's new Moonshot server, which runs on an ARM chip, the same kind of processor that powers smartphones and tablets.
But Goldman Sachs analysts Bill Shope, Elizabeth Borbolla, and Cristina Colon say that investors are letting hopeful sentiment get the better of them. HP still has a lot of work to do, they warned.
"We laud HP’s cash management in the most recent quarter, but one quarter does
not necessarily spell a turnaround," they wrote in a research note. "The current restructuring actions will be largely countered by incremental weakness in PCs, enterprise hardware, services and printing in FY2013."
SEE ALSO: Meg Whitman: 'Moonshot' Servers Will Make You Rethink HP's Products
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