Hewlett-Packard could unlock upward of $5 a share in value by breaking up its divisions, UBS analyst Steven Mulinovich told CNBC on Monday.
On “Fast Money,” he reiterated a call for the tech company to split up. “We’re really trying to put a stake in the ground this time, though, and say that it’s just increasingly making too much sense.”
Mulinovich said that his analysis shows that Hewlett-Packard, whose CEO Meg Whitman sent shares lower on warnings of lower earnings ahead, would unlock value for shareholders.
(Read More: For Some, Hewlett-Packard ‘A Screaming Buy’)
“It suggests the company is worth north of $20 per share,” he added, although he noted that the company still faced management challenges and an “eroding brand.”
“Basically, the worst parts of the business are dragging the better ones down,” he said. “So while there’s no silver bullet, we still think at the end of the day it’s going to be worth more broken up than whole.”
Hewlett-Packard shares were down more than 40 percent year to date. PC maker Dell was down 33 percent. Meanwhile, IBM was up almost 14 percent.
Joe Terranova of Virtus pointed out that growth in the PC market was “horrible” and said the company was unlike another big player in the sector.
“IBM saw the future. That’s why investors are rewarding IBM,” he said. “HP, they can’t even see the present right now.”
Stephen Weiss of Short Hills Capital was not a buyer.
“I just think it’s a value trap, and it smells more like an Eastman Kodak — although not that bad — than it does of an IBM,” he said.
Trader disclosure: On Oct. 8, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Simon Baker is long AAPL; Simon Baker is long JPM; Simon Baker is long WFC; Simon Baker is long GOOG; Simon Baker is long UNH; Simon Baker is long NFLX; Stephen Weiss is long T; Stephen Weiss is long VZ; Stephen Weiss is long VOD; Stephen Weiss is long QCOM; Stephen Weiss is long BAC; Stephen Weiss is long CLNY; Stephen Weiss is long MTGE; Stephen Weiss is short AAPL PUTS; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long VLO; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long GLW; Joe Terranova is long EMC; Joe Terranova is long NXPI;
For Steve Milunovich
1. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: HPQ
2. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.:
HPQ
3. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: HPQ
4. Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: HPQ.
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