NEW YORK (Reuters) - Hewlett-Packard Co's share price fell in early trading yesterday, three days after CEO Mark Hurd resigned following an investigation into his relationship with a contractor.

HP shares, which had doubled since Hurd took the helm five years ago and implemented drastic cost cuts, were trading at around $42.58 yesterday morning, down eight percent from their NYSE close of $46.30 on Friday.

They had fallen 10 percent in extended trade on Friday, after HP said an investigation found that Hurd had falsified expense reports to conceal a relationship with a female contractor who was identified as sometime-actress Jodie Fisher on Sunday.

Some analysts said the shares looked cheap after the sell-off, but investors weren't entirely convinced given uncertainty over whether Hurd's successor could lead HP against competitors like IBM, Apple Inc and Cisco Systems Inc.

"Many senior executives fail. So you don't know whether someone is going to be good in the seat until they're in the seat for six to 12, sometimes 24 months... So that's the risk," said Louis Miscioscia, an analyst at Collins Stewart.

HP wants to find a new CEO as soon as possible, and is looking for candidates inside and outside the company. Chief financial officer Cathie Lesjak will run the company in the interim, and will not run for CEO, HP said.

HP shares were attractively valued before Friday's shocking news, and looked more so after the decline, Miscioscia said.

"The good thing is that the company is in much better shape than it's been in the last 10 years," he said. "It is no longer a turnaround situation as it was when he took over."

Stifel Nicolaus maintained a "buy" rating on HP shares, but lowered their target price to $53 from $62 and removed them from the Stifel Select list.

The shares were likely to trade sideways until a CEO successor is named, said Stifel Nicolaus analyst Aaron Rakers.

In the meantime, he said, investors were left to question whether there are "further issues amiss within HP," as well as who the next CEO will be, and how the company's other executives will deal with the change.

HP's most direct competitor is IBM, which like HP sells hardware, software and technology services to the world's biggest companies. HP also faces competition from Cisco, which has begun selling servers to large corporate data centres.