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Palo Alto, California-based HP Inc. (HPQ) provides personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. Valued at a market cap of $30.5 billion, the company operates through three segments: Personal Systems, Printing, and Corporate Investments.
Shares of this computer hardware company have lagged behind the broader market over the past 52 weeks. HPQ has gained 11.6% over this time frame, while the broader S&P 500 Index ($SPX) has soared 20.9%. Moreover, on a YTD basis, the stock is down 1.9%, compared to SPX’s 1.9% rise.
Narrowing the focus, HPQ has also underperformed the Technology Select Sector SPDR Fund’s (XLK) 12.6% gain over the past 52 weeks but has outpaced XLK’s 2.1% decline on a YTD basis.
On Jan. 30, the U.S. Department of Justice (DOJ) filed an antitrust lawsuit to block HP Inc.'s (HPQ) $14 billion acquisition of Juniper Networks (JNPR), citing concerns over reduced competition in the networking equipment market. The DOJ argued that the merger would leave just two dominant players - HP and Cisco Systems (CSCO) controlling over 70% of the U.S. networking market, potentially stifling competition. Following the news, HP shares declined by nearly 2%.
On Nov. 26, HPQ released its Q4 and fiscal 2024 earnings results, which fell short of expectations. The company reported Q4 non-GAAP earnings of $0.93 per share and revenue of $14.1 billion, both missing analyst estimates. As a result, HPQ shares plunged 11.4% the following day.
Despite the market reaction, earnings grew 3.3% year-over-year, while revenue increased 1.7%. However, rising commodity costs pressured operating profit margins, impacting overall performance. Additionally, HPQ’s guidance for Q1 and full-year 2025 came in below analysts’ expectations, further dampening investor confidence.
For the current fiscal year, ending in October, analysts expect HPQ’s EPS to grow 5.3% year over year to $3.56. The company’s earnings surprise history is mixed. It beat or met the Wall Street estimates in two of the last four quarters while missing on other two occasions.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on four “Strong Buy,” nine “Hold,” and one “Strong Sell” rating.
On Jan. 3, Bernstein analyst Toni Sacconaghi maintained a “Market Perform” rating on HPQ and raised its price target to $34, which indicates a 6.2% potential upside from the current levels.
The mean price target of $37.11 represents a 16% upside from HPQ’s current price levels, while the Street-high price target of $44 suggests an upside potential of 37.5%.
