Bank suggests HP break itself up

The company would be worth more than $20 a share if its businesses operated independently, the analysts said. HP shares closed Monday at $14.46.

"HP, with its fully developed enterprise and consumer businesses, should split up in order to realize greater value," wrote the analysts led by Steven Milunovich, who have a sell rating on Hewlett-Packard. "HP's units are not minnows but rather they are whales packed into the same pond."

Whitman has said that she won't spin off the PC business, a move contemplated by her predecessor, Leo Apotheker.

UBS in its report said the computer company would lose purchasing power in a breakup, while gaining "focus" and branding power, an idea Hewlett-Packard rebuffed. "No matter how you look at it we are confident that HP is stronger together than apart," spokesman Michael Thacker said in a statement.

"The company's operations across business units are deeply integrated and our customers have told us that they want one HP."

The company may need to reconsider that stance and break itself up, "prompted by activists or private equity," according to UBS.

CEO for a year, Whitman has been trying to revive growth after years of management upheaval, shifts in strategy and late entry to key markets like tablet computers.

"Our customers make long-term investments. This start-stop of the last three years -- you can't run the railroad that way," Whitman told analysts on Oct. 3. "The two growth engines of our company are going to be the software business and the enterprise business."

At the company's current market capitalization, investors are essentially "getting the PC and printer businesses for free," Milunovich wrote. The enterprise value of the company's parts, when accounting for cash and debt, could be $20.97 a share next year, he said.

"Although we think HP is in denial about the growth prospects for PCs and possibly printers, the fact is that HP has substantial assets," Milunovich wrote.