HP Inc.: Balanced View with Limited Upside as Memory Headwinds Offset Operational Levers

Analyst Wamsi Mohan of Bank of America Securities maintained a Hold rating on HP, retaining the price target of $26.00.

Wamsi Mohan has given his Hold rating due to a combination of factors that balance HP’s opportunities with its risks. He acknowledges that HP has multiple tools to cushion the impact of rising memory costs—such as diversifying suppliers, adjusting product configurations, controlling non-memory costs, and emphasizing higher-margin peripherals—but believes these actions primarily stabilize earnings rather than drive meaningful upside. His valuation, reflected in a $26 price objective based on HP’s expected 2026 earnings, suggests only moderate appreciation from current levels, supporting a neutral stance.

At the same time, Mohan sees constructive but not transformative catalysts across HP’s segments. In PCs, he notes that while HP is well-positioned on supply and may gain share versus smaller players, unit growth could be constrained at the low end by memory availability and pricing, limiting revenue acceleration. He is positive on the long-term potential of AI PCs and sees print as a margin-supportive business, particularly with higher-margin supplies, industrial printing, and subscription offerings, as well as potential tariff relief. However, he concludes that earnings growth will rely heavily on financial levers like share repurchases and cost cuts, which are largely offset by memory headwinds, justifying a Hold rather than a more bullish rating.

Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HPQ in relation to earlier this year.