) to in-line from outperform on valuation.
Analyst Richard Gardner says shares now trade at 19 times his $4.40 2003 earnings per share estimate, towards the high end of a price-earnings multiple in the historical range of eight to 20, excluding the bubble period. Gardner recommends using current strength to reduce positions in IBM to marketweight. He says he would buy shares at around $75.
Gardner also notes his $4.73 2004 earnings per share estimate combined with peak multiples of 18 to 20 suggest upside potenital to $85 to $95 within 12 months, or 1% to 15% from current levels. Gardner says Hewlett-Packard offers superior returns. He rates the PC & enterprise hardware industry as marketweight.