(Reuters) - Hewlett-Packard Co (>> Hewlett-Packard Company) shares rose as much as 11 percent on Friday after the company's better-than-expected quarterly results and forecasts prompted at least eight brokerages to raise price targets on the stock, although analysts said problems at the world's No.1 PC maker were far from over.
HP's upbeat outlook comes as the company cuts costs under Chief Executive Meg Whitman's turnaround plan in the face of falling PC sales and slowing corporate IT spending.
"Although a number of businesses remain under pressure, the company's blocking and tackling is improving, and the likelihood of the bottom falling out appears diminished," UBS Investment Research analyst Steven Milunovich said in a note.
Milunovich upgraded his rating on the stock to "neutral" and raised his price target to $17 from $12.
HP shares were up 11.05 percent at $18.99 in early trading after hitting a high of $19.04. They have outperformed all other Dow Jones Industrial Average <.DJI> constituents this year.
Before Friday's gains, the stock was up about 20 percent since the beginning of the year, helped partly by a buyout offer for rival Dell Inc (>> Dell Inc.).
HP, like other PC makers, has been hammered as consumers turn to tablets and other mobile devices. Underscoring the severity of the industry's woes, Dell on Tuesday reported a 31 percent drop in profit as sales fell in virtually every major business division.
In addition, HP has suffered internal turmoil with a failed spin-off attempt, a botched acquisition and two CEOs losing their jobs.
J.P. Morgan Securities analyst Mark Moskowitz, who raised his price target on HP stock by $1 to $22, said the company's results and outlook signaled that the worst may be over, but added that there was room for plenty of work to be done.
Whitman, who took over the reins at HP over a year ago, plans to cut an estimated 29,000 jobs, or about 10 percent of the workforce, over the next two years. She has also reversed a decision to spin off HP's PC division.
"We have a long way to go... this is a multi-year journey to the turnaround," Whitman said in an interview to CNBC on Friday.
She had last year warned of a tough 2013, with earnings set to decline steeply, but said on Friday revenue growth is likely to return in 2014.
Eight brokers, including Jefferies & Co, RBC Capital Markets, Evercore Partners and BMO Capital Markets and Credit Suisse also increased their price targets on HP's stock by an average of $4.19.
But some analysts remained more skeptical than the others.
"While consensus will likely view the unchanged FY guidance as conservative after a stronger-than expected H1, we continue to see headwinds," Jefferies' Peter Misek said.
Deutsche Bank's Chris Whitmore, raised his forecast on the company's shares based on improved earnings outlook, but has a $12 target -- well below HP's current valuation.
Whitmore rates HP a "sell" and said he remained negative, citing continued revenue losses and a weak economy.
"We remain concerned about ongoing weak printer unit shipments and the structural decline of this market, ongoing deterioration across the PC industry on both a unit and pricing basis, poor bookings performance and future contract losses in Services...", he said in a client note.
HP derived over 17 percent of its second quarter revenue from sales of printers, copiers and related services -- a business that has lately borne the brunt of slowing corporate spending.
(Reporting by Himank Sharma in Bangalore; Editing by Rodney Joyce, Ted Kerr, Sreejiraj Eluvangal)