Bernstein analyst Mark Newman maintained a Hold rating on HP today and set a price target of $30.00.
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Mark Newman has given his Hold rating due to a combination of factors impacting HP’s financial outlook. One of the primary reasons is the anticipated rise in memory prices, which is expected to negatively affect the company’s earnings per share (EPS) by approximately 10% in fiscal year 2026. This impact is largely due to HP’s slower pricing adjustments compared to competitors like Dell, which can more dynamically manage pricing due to their direct sales model and leaner inventories.
Furthermore, the revised financial estimates reflect a decrease in gross profit margin and operating margin for FY26, with a notable reduction in EPS from $3.43 to $3.09. Despite maintaining revenue estimates, the adjustments in profit margins and net income projections indicate a challenging period ahead. However, the impact of rising memory costs is expected to diminish in subsequent years, with only a modest effect on FY27 EPS and no anticipated impact in FY28. These factors contribute to the Hold rating, suggesting a cautious outlook while acknowledging potential for stabilization in the future.
Newman covers the Technology sector, focusing on stocks such as Apple, Dell Technologies, and SanDisk Corp. According to TipRanks, Newman has an average return of 9.8% and a 50.00% success rate on recommended stocks.
In another report released on November 28, Goldman Sachs also maintained a Hold rating on the stock with a $24.00 price target.