Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Can HP Bounce Back To Its Recent Highs Following Q3 Earnings Release?

Published 22/08/2017, 11:49
Updated 09/07/2023, 11:32

By Connor Campbell, Financial Analyst, Spreadex

Stock of the day: HP Inc

Despite a bit of a wobble at the start of summer 2017 has been a pretty great year for HP (NYSE:HPE). After a steady rise across the first few weeks of 2017, the stock burst into lift on February 23rd as investors sent HP 8.6% higher off the back of its Q1 results. Revenue rose 3.6% to $12.7 billion, almost a billion dollars higher than the $11.8 billion forecast by analysts, while adjusted earnings were up 6% to 38 cents per share.

HP continued to climb in the months after, with things like a ‘Buy’ rating from Citigroup (NYSE:C) and a bullish note from UBS (NYSE:UBS) – thanks to forecast a revival in the PC market – helping send the stock to a high of $19.49 by mid-May. A week or so after that peak HP released its second quarter report – it was here that the stock got into a bit of bother.

Once again HP far outstripped analysts’ estimates, posting a 7% surge in revenue to $12.39 billion, compared to the $11.93 billion forecast, with earnings per share of 40 cents against the 39 cents anticipated. CEO Dion Weisler labelled it a ‘breakthrough quarter’ for the company, after its personal systems and print divisions both grew for the first time since 2010.

Yet after a brief spike in the hours after that Q2 update the stock sank, eventually falling below $17.50 between the end of June and start of July as tech stocks broadly fell out of favour with investors. Since then a string of positive ratings and price target upgrades have rescued the stock, with HP (briefly) crossing the $19.50 mark in August. HP Inc now sits at a current trading price of $18.57.

In terms of Wednesday’s third quarter statement, analysts are expecting a 3.3% rise in revenue to $12.28 billion but with a 12.5% dip in earnings to 42 cents per share. Investors, on the other hand, might be looking for a bit more given HP’s tendency to beat estimates in the last couple of quarters.

HP Inc (NYSE:HPQ) has a consensus rating of ‘Buy’ with an average target price of $19.78.

Spreadex: HP Inc

Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.

In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.