Analyst Krish Sankar from TD Cowen maintained a Hold rating on HP (HPQ – Research Report) and decreased the price target to $38.00 from $39.00.
Krish Sankar has given his Hold rating due to a combination of factors influencing HP’s current market position. One of the primary reasons is the company’s reiterated FY25 EPS and FCF outlook, which, although stable, shows a lighter EPS view for April 2025 as growth is expected to be more significant in the latter half of the fiscal year. The fundamentals in HP’s Personal Systems and Print divisions remain challenging due to mixed demand trends and intense price competition, despite HP gaining PC market share in FY24 and increasing its Future Ready cost savings target, which provides some buffer against uncertainties.
Additionally, while HP’s January 2025 results aligned with market expectations, the EPS outlook was slightly underwhelming due to ongoing softness in the Print market and increased variable compensation expenses. The unfavorable foreign exchange rates and soft print demand in China further complicate the outlook. However, the company’s strategic cost savings initiatives and commercial demand ahead of the Windows 10 end-of-life in October 2025 offer some positive near-term fundamentals, justifying the Hold rating as HP navigates these mixed conditions.
In another report released today, Citi also maintained a Hold rating on the stock with a $36.50 price target.