New York,Shares in Hewlett-Packard down by more than a fifth to a six-year low early Aug-19, a day after the world's biggest PC maker HP indicated a major shake-up in its business and cut its annual forecast.The decline redued some $14.5 billion off the company's market capitalization.
Shares of HP fell to $22.76 in heavy early morning trading on friday, making it the top loser on the New York Stock Exchange. The broader S&P 500 Index fell nearly 1 % amid global fear.
With a forward 12-month price-to-earnings ratio of 5.6, the company is trailing its peers, including Apple Dell, and IBM as per to Starmine SmartEstimate.
Excluding losses on Thursday and Friday, HP's stock has lost nearly a fifth of its value since the world's largest PC maker reported second-quarter results on May 17.
"HP is undergoing a sound strategy transformation by focusing on high-growth, high-margin opportunities in the enterprise/commercial markets," Gleacher and Co wrote in a note and cut its price target to $39 from $50.
"However, we materially underestimated the magnitude and timing of this metamorphosis, i.e. IT service margin decline, challenged storage growth."
HP has stopped the manufacturing of its WebOS-based devices like its TouchPad tablet, which failed to score with consumers.
"Last night HP may have eroded what remained of Wall Street's confidence in the company and its strategy," Needham & Co said in a research note.
Brokerage Robert W. Baird said HP is no longer a "safe haven" stock and expects it to lose market share.
HP's decision to spin off the PC business reflects commoditization, as consumers change the use of computers, and this may hurt Intel, the world's largest supplier of PC chips, brokerage Nomura said in a note.
"A reversal in average selling prices would remove a key revenue driver over the last six quarters (for Intel)."
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