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HP Inc. (HPQ), headquartered in Palo Alto, California, delivers various innovative and sustainable devices, services, and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. Valued at $35.36 billion by market cap, the company operates in more than 170 countries. The global technology leader and creator of solutions is expected to announce its fiscal third-quarter earnings for 2024 on Tuesday, Sep. 3.
Ahead of the event, analysts expect HPQ to report a profit of $0.86 per share on a diluted basis, unchanged from the year-ago quarter. The company has beaten or matched Wall Street’s EPS estimates in its last four quarterly reports.
For fiscal 2024, analysts expect HPQ to report EPS of $3.45, up 5.2% from $3.28 in fiscal 2023.
HPQ stock has outperformed the S&P 500’s ($SPX) 14.5% gains on a YTD basis, with shares up 20.1% during this period. Similarly, it outshined the S&P 500 Technology Sector SPDR’s (XLK) 12.1% gains over the same time frame.
HPQ’s overall performance can be attributed to the surrounding its role in artificial intelligence and its solid Q2 results. The company claimed that it offers the largest portfolio of AI PCs and believes its AI PCs will gain traction in the upcoming quarters. In Q2, PC sales recovered from the slump over the past two years by registering a 3% year-over-year growth.
Emphasizing the expected growth of AI PCs, CEO Enrique Lores said during the Q2 earnings call, “In the second half, we expect to see the introduction of AI PCs accelerate demand over and above the anticipated PC refresh cycle and Windows 11 rollout. We believe the AI opportunity in front of us will help drive higher ASPs and premium mix.”
On May 30, HPQ shares closed up more than 16% after the company reported its Q2 results. Its revenue of $12.80 billion beat consensus estimates of $12.60 billion. The company’s adjusted EPS was $0.82, surpassing Wall Street estimates of $0.81. For the third quarter, HPQ expects its non-GAAP EPS to be between $0.78 and $0.92. Moreover, for fiscal 2024, its non-GAAP EPS is expected to be between $3.30 and $3.60, and free cash flow is likely between $3.10 and $3.60 billion.Analysts’ consensus opinion on HPQ stock is bullish, with a “Moderate Buy” rating overall. Out of 13 analysts covering the stock, five advise a “Strong Buy” rating, one has a “Moderate Buy” rating, six recommend a “Hold” rating, and one gives a “Strong Sell.” The average analyst price target for HPQ is $34.85, indicating a 3.5% potential downside from the current levels.
On the date of publication, Dipanjan Banchur 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.
