Barclays Downgrades HP, Ingram On Currency Pressure


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The downward pressure on IT product pricing resulting from a slide in the euro over the last week has sparked a downgrade on Hewlett-Packard and Ingram Micro from the investment research arm of Barclays.

Barclays U.S. IT Hardware Analyst Ben Reitzes Thursday downgraded both HP and Ingram Micro from overweight to equal weight, and lowered the price target for HP from $42 to $35 and Ingram from $29 to $26. 

HP shares were trading up less than 1 percent, or 10 cents, to $32.71 in midday trading. Ingram shares were trading down 3 percent, or 77 cents, to $22.70 in midday trading.

[Related: HP Shares Slide In After-Hours Trading On 5 Percent Sales Drop, Currency Issues]

Both HP and Ingram, which derive the majority of their sales overseas, have been hit hard by the sliding euro, which negatively impacts international sales and profits for U.S.-based companies. The euro is down 24 percent versus the dollar year-over-year and down 5 percent since March 1.

The move in currencies means the "repricing" of many "transactional products like PCs, servers, printers, supplies, etc. needs to be redone and rethought," said Reitzes in a research note.

Reitzes said $12 billion solution provider behemoth CDW is "largely immune because it is over 90 percent U.S.-based and its execution has been a standout in the IT sector."

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