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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. With a market cap of $32.6 billion, the company offers products that include laser and inkjet printers, scanners, copiers and faxes, personal computers, workstations, storage solutions, computing, and printing systems.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and HPQ perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the computer hardware industry. HP drives growth through its diverse, innovative product portfolio, spanning commercial and consumer markets. Strong demand for its personal systems, particularly in commercial PCs, fuels unit volume and revenue gains. At the forefront of innovation, HP introduces AI-powered PCs and hybrid systems tailored to the shifting landscape of hybrid work and learning environments.
Despite its notable strength, HPQ slipped 15.7% from its 52-week high of $39.52, achieved on May 30. Over the past three months, HPQ stock has declined 8.6%, underperforming the Dow Jones Industrials Average’s ($DOWI) 7.1% gains during the same time frame.
In the longer term, shares of HPQ rose 10.7% on a YTD basis, outperforming DOWI’s YTD gains of 9.8%. However, HPQ shares climbed 17.6% over the past 52 weeks, underperforming DOWI’s 19.7% returns over the same time frame.
To confirm the recent bearish trend, HPQ has been trading below its 50-day moving average recently. However, it is trading above its 200-day moving average since early May.
HPQ's overall performance can be attributed to its strategic approach to competitive pricing in response to rising commodity costs and a decline in Consumer PS shipments. Additionally, external factors such as the competitive landscape, with HPQ's Japanese rivals benefiting from a weaker Yen, slow market recovery, and underperformance in China, have also played a role in the company's underperformance.
On Aug. 28, HPQ reported its Q3 results, and its shares closed up more than 2% in the following trading session. Its revenue of $13.5 billion was better than the consensus of $13.4 billion. Its adjusted EPS declined 3.6% year over year to $0.83. For Q4, HPQ expects adjusted EPS to be between $0.89 and $0.99. The company estimates full-year adjusted EPS between $3.35 and $3.45.
In the competitive arena of computer hardware, Dell Technologies Inc. (DELL) has taken the lead over HPQ, delivering 49.4% returns on a YTD basis and solid 62.2% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on HPQ’s prospects. The stock has a consensus “Moderate Buy” rating from the 13 analysts covering it, and the mean price target of $35.54 suggests a potential upside of 6.7% from current price levels.
On the date of publication, Neha Panjwani 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.
