On Thursday, Loop Capital revised its stock price target for HP, Inc. (NYSE:HPQ) to $35, down from the previous $35, while maintaining a Hold rating on the stock. Following HP's earnings report for the July quarter, which was released on August 28, and recent industry research, the firm adjusted its outlook.
HP reported earnings per share for the July quarter and is witnessing early signs of a significant PC refresh opportunity, which may be bolstered by the introduction of AI-powered PCs and upgrades to Windows 11. Loop Capital notes that HP is poised for potential profit and loss momentum over the next few years, driven by several factors.
The anticipated momentum for HP is attributed to a PC refresh cycle, the introduction of higher average selling price (ASP) AI PCs, and operational profit growth as commercial print spending increases with more employees returning to the office.
Loop Capital emphasizes the importance of these factors in driving HP's performance, suggesting that the company is approaching a period of attractive financial dynamics. The firm's updated price target reflects their current assessment of HP's market position and future prospects based on recent data and supply chain analysis.
In other recent news, Hewlett Packard (HP) has announced major developments in its operations. The tech giant is pursuing a legal case against the estate of the late British billionaire Mike Lynch, seeking up to $4 billion in damages related to HP's acquisition of the British tech company Autonomy. This follows HP's victory in a civil lawsuit against Lynch and Autonomy's former chief financial officer, Sushovan Hussain.
On the financial front, HP's third-quarter 2024 earnings per share fell short of estimates due to underperformance in its Print segment. However, the company experienced a 2% year-over-year revenue increase, marking its first revenue growth in nine quarters, primarily driven by its Personal Systems segment.
TD Cowen and Goldman Sachs (NYSE:GS) have maintained their Hold and Neutral ratings on the company's shares, respectively, in light of these developments.
HP has also announced a new $10 billion share buyback program and reaffirmed its fiscal 2024 free cash flow forecast of $3.1 to $3.6 billion. The company's acceleration of its cost restructuring plans and the introduction of AI PCs are strategic efforts to maintain financial stability and growth. These are the latest developments for HP.
InvestingPro Insights
As HP, Inc. (NYSE:HPQ) navigates through industry changes and market expectations, recent metrics from InvestingPro provide a snapshot of the company's financial health and investor sentiment. With a market capitalization of $34.05 billion and a P/E ratio of 12.22, HPQ is trading at a valuation that suggests a balance between its earnings and market price. The adjusted P/E ratio over the last twelve months leading up to Q3 2024 further refines this view, indicating a slightly lower ratio of 10.75, which could be appealing to value-oriented investors.
InvestingPro Tips highlight that HPQ has been aggressively buying back shares and boasts a high shareholder yield, which may signal confidence from management in the company's future. Moreover, the company has raised its dividend for 7 consecutive years, underscoring a commitment to returning value to shareholders.
With a dividend yield of 3.12% and a 4.99% growth in dividends over the last twelve months as of Q3 2024, HPQ presents itself as a potentially attractive option for income-focused investors. Meanwhile, the company's stock has experienced a 21.35% one-year price total return, reflecting a positive trend in shareholder returns.
For investors considering HPQ, these metrics and additional InvestingPro Tips, which include 13 more tips available on the platform, provide a deeper understanding of the company's financial position and market performance. The insights offered by InvestingPro, such as the company's strong free cash flow yield and its status as a prominent player in the Technology Hardware, Storage & Peripherals industry, can be crucial for making informed investment decisions.
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