HP this morning lost one of the few Wall Street analysts that was still giving it the benefit of the doubt. Sterne Agee analyst Shaw Wu downgraded his recommendation to neutral, telling us that HP's balance sheet is so awful, the company's stock is really worth negative $2.

"Their balance sheet is a mess," Wu told Business Insider. "We calculated—I couldn't believe this—the tangible book value [at] -$2 [a share]. The book value, when you look at it, says $16. But you have to take out the $36 billion in goodwill. They are going to write that off, the whole thing at some point. So basically, the company's intrinsic value is negative. They are fortunate the stock's not zero. This is not an opinion. These are facts."

Besides the balance sheet, Wu says the company has a handful of other issues for which there's no easy fix. These include a PC business under attack from mobile devices, Windows 8 sales that will likely be lackluster and a printer business dying as people shift to electronic displays.

"We've given them the benefit of the doubt," Wu told Business Insider. "They are blaming everything on the economy. But the problems they have are not economy-related. If that's the case, why are Apple and IBM doing well? To us that makes no sense. So we think the problems are structural."

On Wednesday, HP CEO Meg Whitman surprised analysts by saying HP's earnings will fall by more than 10 percent next year. This was after the company reported its biggest quarterly loss in company history, including an $8 billion write off of goodwill from its $13.9 billion EDS acquisition in 2008. Whitman said it could be 2016 before revenue growth picks up again.

We asked Wu if he thinks Whitman is doing a good job. He paused.

"I don't need to say," said Wu. "The market has voted. The stock's been cut in half."

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