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Valued at a market cap of around $33 billion, California-based HP Inc. (HPQ) is a prominent technology company specializing in personal computing, imaging, and printing solutions. The company delivers a broad spectrum of products and services to individual consumers, businesses, and government entities globally.
Shares of this personal computer and printer maker have significantly underperformed the broader market over the past 52 weeks. HPQ has gained 3.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 18.5%. In 2024, HPQ's shares have climbed 12.1%, mirroring SPX's YTD gains.
Zooming in further, HPQ has lagged behind the S&P 500 Technology Sector SPDR's (XLK) 17.5% gains over the past 52 weeks. However, HPQ has outpaced XLK's 6.4% increase on a YTD basis.
HP has underperformed over the past year due to a decline in its high-margin printing business, which has faced decreasing sales. Also, the company’s slower revenue growth and weaker performance in its personal computing segment compared to competitors have contributed to its lagging stock performance.
However, the stock soared and nearly hit an all-time high on May 30, driven by a notable rebound in PC sales and improvements in the company's balance sheet. The reduction in net debt, combined with ongoing shareholder returns through dividends and buybacks, contributed to the market's positive reaction.
For the current fiscal year, ending in October, analysts expect HPQ's EPS to grow 5.2% year over year to $3.45. The company's earnings surprise history is promising. It beat or met the consensus estimates in all of the last four quarters.
Among the 13 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on five "Strong Buy" ratings, one "Moderate Buy," six "Holds,” and one "Strong Sell."
The configuration is slightly more bullish than three months ago, with two “Strong Sell” ratings on the stock.
On Jul. 24, HSBC maintained a “Buy” rating on HPQ stock and raised its price target to $45 - the street-high price target. This implies a modest potential upside of 33.5% from the current price levels.
The mean price target of $35.77 represents a premium of just 6.1% to HPQ's current 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.
