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HP Inc. (HPQ), with a market cap of $30.6 billion, is a leading global supplier of personal computing devices, imaging, and printing products, along with related solutions and services. The Palo Alto, California-based company serves a diverse range of customers, including individuals, SMBs, and large enterprises.
Shares of the PC-making giant have significantly underperformed the broader market over the past 52 weeks. HPQ has gained only 2.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27.5%. In 2024, shares of HP are up 3.8%, compared to the SPX's 11.2% gains on a YTD basis.
Zooming in further, HPQ lagged behind the Information Technology ETF Vanguard's (VGT) 35.1% gain over the past 52 weeks and a 10% YTD return.
HPQ has underperformed the broader market due to stagnant PC sales and challenges in the printing industry. The marginal fall in HP stock on Feb 28 after missing Q1 revenue estimates, reflecting ongoing decline in PC market demand due to delayed upgrades and cautious enterprise spending amidst economic uncertainty.
For the current fiscal year, ending in October, analysts expect HPQ's EPS to grow by 4.3% to $3.42 on a diluted basis. The company has a mixed earnings surprise history, with one quarter exceeding and three quarters meeting expectations of the last four quarters.
The consensus view on the stock remains overall bullish, with a "Moderate Buy" rating based on 13 analysts covering the stock. This includes five "Strong Buys," one "Moderate Buy," five "Holds," and two "Strong Sells."
This configuration has been consistent over the past months.
On May 16, Bank of America (BAC) raised HP's price target to $35 with a "Buy" rating ahead of HP's Q2 financial results, expecting earnings to meet guidance and viewing Berkshire Hathaway's exit as a potential growth catalyst. This suggests a potential upside of 12.2% from current levels.
The stock is currently trading slightly below the mean price target of $31.85. The Street-high price target of 40 implies a potential upside of 28.2% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
