Hewlett-Packard (NYSE:HPQ) has been one of the most surprising stocks this year to date. Shares were up 52 percent through March 18, a tremendous rally punctuated by bullish commentary from Katy Huberty, a managing director at Morgan Stanley.

Speaking on CNBC’s “Fast Money” on Monday, Huberty suggested that HP could beat its fiscal 2013 fee cash-flow guidance by as much as 35 percent. “They guided to $5 billion. We’re assuming that they’ll do $6.7 billion,” she said. HP has already contributed $2.1 billion to that target in a strong fiscal first quarter.

What’s more, Huberty played down concerns about the company’s ability to increase its 2013 revenue, which analysts are estimating will fall 5.8 percent to $113.39 billion this year.


*Average analyst estimate.

“I don’t think they need to grow revenue in the next 9 months,” she told CNBC. “The call right now is about earnings and free cash flow recovery.”

With a mean price target of $18.30 and with an epic rally behind it, some observers have pointed out that HP’s stock is looking a bit overbought. If revenues don’t grow over the next nine months and movement on the chart looks limited, investors could take profits and move their money elsewhere. All good rallies must come to an end, and a majority of Hold positions biased toward Underperform suggests that the analysts foresee a time when the turnaround buzz wears off.

If HP wants to avoid the bad mojo that comes with another decline on the stock chart, then it will need to find a way to reward shareholders for their patience. CEO Meg Whitman has been very public about the long timeline of the company’s turnaround, and Huberty suggests that HP won’t forget to fill the void with plenty of love for shareholders.

“Cash return in the form of a buyback or higher dividend is a likely scenario,” she wrote in a research note published on Monday, according to Bloomberg. “Even without revenue growth, we expect HP to grow earnings per share and free cash flow over the next three years.”

With a Buy rating and a $27 price target — 18.27 percent above Monday’s closing price — Huberty’s position is abnormally bullish. Many investors and analysts feel that the industry and competitive landscape remains a tremendous obstacle for the company, despite positive buzz about Whitman’s ability to right the ship.

Taking a lot of attention is HP’s relationship with the PC industry, which has been a war zone over the past decade. Apple (NASDAQ:AAPL) is the dominating player, gaining status as a celebrity stock for pioneering mobile computing. Meanwhile, Microsoft (NASDAQ:MSFT) continues to weather industry and economic headwinds backstage, shielded somewhat by the launch of Windows 8 but failing to impress the pants off the mass market.

Huberty cited HP’s divergence from reliance on the Wintel ecosystem as a plus, but adopting the new face of the rapidly-changing tech world will likely be a difficult transition for HP. Printers and servers are seen as a bright spot in the near term as the company sorts out its new role in the industry.

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