On Thursday, Morgan Stanley (NYSE:MS) demonstrated confidence in HP Inc. (NYSE:HPQ) by raising its price target for the company's shares to $37 from the previous target of $36, while keeping an Overweight rating on the stock. This adjustment reflects the firm's positive outlook on HP's potential in the recovering PC market.
The firm cited the year-over-year growth in the PC sector as a contributing factor to HP's favorable position. However, they noted that the stabilization of the printing segment is the last major challenge HP must overcome to achieve a significant re-rating of its stock value. The analyst expressed optimism that the easing of year-over-year comparisons would be beneficial but emphasized the importance of HP's performance in the second half of the year.
HP's progress in the PC market is seen as a potentially lucrative opportunity, with the company poised to benefit from the sector's recovery. Morgan Stanley's stance remains Overweight, indicating a belief that HP's stock will outperform the average return of the stocks the analyst covers over the next 12 to 18 months.
The price target increase to $37 suggests that Morgan Stanley sees a modest but positive upside from HP's current trading levels. The target is based on the firm's projections and analysis of the company's future earnings potential.
InvestingPro Insights
In light of Morgan Stanley's optimistic outlook on HP Inc. (NYSE:HPQ), real-time data from InvestingPro underscores several facets of the company's financial health and market performance. With a market capitalization of approximately $32.09 billion and a compelling P/E ratio of 9.64, HPQ appears to be trading at a discount relative to its near-term earnings growth. The company's PEG ratio, standing at 0.24, further highlights the potential for earnings growth to outpace the current valuation.
InvestingPro Tips suggest that HPQ has a strong history of rewarding shareholders, having raised its dividend for 7 consecutive years and maintaining dividend payments for 54 consecutive years. Additionally, the stock has shown a robust return over the last month, with a 16.77% increase, and a steady return over the last three months at 16.82%. This performance is complemented by the company's status as a prominent player in the Technology Hardware, Storage & Peripherals industry.
For investors seeking a deeper analysis, InvestingPro offers additional tips on HP Inc. that could further inform investment decisions. To explore these insights, consider visiting https://www.investing.com/pro/HPQ. Additionally, use the coupon code PRONEWS24 to receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to a broader array of InvestingPro Tips, of which there are 15 more listed for HPQ.
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