HP (HPQ) is accelerating its efforts to move its production out of China amid tariff woes. The company’s decision to speed up its production shift comes as it lowered its guidance for the full year due to higher-than-anticipated tariffs and moderating demand for hardware. HPQ stock slumped about 8% in Wednesday’s extended trading session in reaction to the Q2 FY25 earnings miss and guidance cut.
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HP Makes Production Changes to Mitigate Tariff Pressures
HP CEO Enrique Lores stated that tariff charges were higher and hit more countries than the company’s expectations. Consequently, the company has ramped up production in Vietnam, Thailand, India, Mexico, and the U.S.
In fact, HP expects to source almost all of its products sold in North America from outside China by the end of June. This marks an acceleration from the company’s previous plan of having 10% of the products in North America shipped from China by September.
Additionally, HP also changed its logistics network. For instance, it removed the U.S. as a distribution hub for products that will be going to Canada or to Latin America. Additionally, the company is planning “targeted pricing actions,” while enhancing its cost control measures.
Is HPQ Stock a Buy, Hold, or Sell?
Following the Q2 FY25 print, JPMorgan analyst Samik Chatterjee lowered the price target for HP stock to $27 from $30, while reiterating a Buy rating. The 5-star analyst stated that HP’s results “will serve as a reminder to investors” of the challenging macro environment for non-AI (artificial intelligence) IT growth drivers, including both Consumer and Enterprise demand, which made the company exercise caution with regard to its second-half guidance.
He noted that HP is leveraging a combination of price hikes and supply chain changes to offset the effect of tariffs on margins. However, the company is expected to reach closer to offsetting the headwinds in Q4 FY25, with part of Q3 still impacted by tariffs. Chatterjee expects near-term headwinds and tariff uncertainty to impact investor sentiment for HPQ stock over the near term.
Overall, Wall Street is sidelined on HPQ stock, with a Hold consensus rating based on three Buys, four Holds, and one Sell recommendation. The average HPQ stock price target of $32.75 implies 20.4% upside potential.
Note that these ratings and price targets might be revised in reaction to the Q2 results and other updates.

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