Analyst Erik Woodring from Morgan Stanley maintained a Sell rating on HP and decreased the price target to $20.00 from $21.00.
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Erik Woodring has given his Sell rating due to a combination of factors impacting HP’s financial outlook. One of the primary concerns is the significant increase in memory prices, which is expected to put pressure on the company’s margins. This inflation in memory costs is anticipated to create a substantial headwind for HP’s earnings per share, particularly affecting their PC segment.
Moreover, Woodring notes that while HP’s management remains optimistic about the continuation of the PC cycle into 2026, the guidance provided is below market expectations. The forecasted earnings per share for FY26 are notably lower than the consensus, and the potential for further downside risks remains. These factors, combined with limited supply and contract renegotiations in the memory market, contribute to the cautious outlook and the decision to maintain a Sell rating with a price target of $20.