GO
Loading...

Settlement "Good News" For HP

Computer services and equipment maker Hewlett-Packard's $14.5 million settlement payment for a boardroom spying scandal is actually a good thing, because it resolves the distracting issue, a UBS Investment Research analyst wrote Friday.

Analyst Benjamin A. Reitzes in a client note left his "Buy" rating and $51 target price unchanged.

"With this announcement, we believe the distractions are largely behind HP and investors can focus on solid fundamentals," the analyst wrote.

HP is likely to focus on long-term operating margin goals of more than 9%, along with plans for spending excess cash at a Tuesday analyst conference, wrote Reitzes.

The company on Thursday said it will pay the sum to settle a civil claim accusing HP of unfairly "pretexting," or impersonating someone else, to obtain phone records in a quest to determine the source of boardroom leaks to the news media. The company also agreed to several corporate governance reforms, such as the appointment of an independent director to watch HP's compliance with privacy guidelines.

The widely publicized scandal led to the ouster and criminal charges against top managers, including former chairwoman Patricia Dunn. Most investors remained unconcerned throughout the brouhaha, however, with shares up 39 percent from the beginning of the year to Thursday's close.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • CNBC contributor Herb Greenberg outlines concerns for the highly anticipated Alibaba IPO. Robert Luna, Surevest Wealth Management, shares his take on the e-commerce company.

  • CNBC's Kayla Tausche reports on the corporate structure of the Chinese e-commerce company, Alibaba.

  • Will the Fed change their language Wednesday? Marc Lopresti, Lopresti Law Group; Danielle Hughes, Divine Capital; CNBC contributor Herb Greenberg; and "Fast Money" Brian Kelly provide perspective.