(Reuters) - At least two brokerages cut their ratings on Hewlett-Packard Co and several lowered their share price targets, blaming HP management for botching the 2011 buyout of British software company Autonomy.
HP stunned Wall Street on Tuesday when it announced an $8.8 billion writedown on the $11 billion buyout, claiming that "a wilful effort by Autonomy to mislead shareholders" had overvalued the company.
Investors may now demand more changes to management at HP, claiming insufficient due diligence on the deal, said J.P. Morgan Securities analyst Mark Moskowitz, who cut his price target on the company's stock to $15 from $19.
Leo Apotheker, who engineered the Autonomy deal, was fired as CEO after less than a year on the job after criticism that he had paid too much for the British company.
HP shares, which fell 12 percent to close at a 10-year low of $11.71 on Tuesday, were trading at $11.80 before the bell.
Credit Suisse's Kulbinder Garcha said that while the blame game would likely go on for a while, it was evident that there were missteps in the due diligence process.
Garcha cut his price target on the stock to $12 from $15.
Mizhuho Securities downgraded HP to "underperform" from "neutral" and slashed its price outlook by almost half to $8, saying it believed there may be more bad news ahead.
"In our view, the company should have uncovered such fraudulent practices earlier in the review process," analyst Abhey Lamda said in a note.
RBC Capital Markets downgraded the shares to "sector perform" from "outperform" and cut its share-price target to $14 from $18. Jefferies & Co cut its price target to $10 from $12, while BMO Capital Markets reduced its target to $14 from $18.
(Reporting by Himank Sharma in Bangalore; Editing by Maju Samuel and Ted Kerr)
Source: http://news.yahoo.com/analysts-cut-hp-price-targets-autonomy-reversal-130424135--finance.html
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