HP’s Strategic Positioning and Recovery Potential Justify Buy Rating Despite Macroeconomic Challenges

In a report released yesterday, Samik Chatterjee from J.P. Morgan maintained a Buy rating on HP (HPQ – Research Report), with a price target of $27.00.

Samik Chatterjee has given his Buy rating due to a combination of factors that highlight HP’s strategic positioning and potential for recovery. Despite the challenges posed by macroeconomic uncertainties and tariff headwinds, HP is actively working to mitigate these impacts through strategic supply chain adjustments and pricing strategies. The company’s focus on servicing U.S. demand from locations outside of China and its Future Ready plan are expected to help stabilize margins in both the Personal Systems and Print segments by the end of the year.
Furthermore, Chatterjee notes that while the near-term outlook includes some caution due to potential demand deterioration, HP’s medium-term prospects remain favorable. The Personal Systems segment is positioned as a key driver of recovery, with expectations of operating margin improvements as inventory levels stabilize. Additionally, structural margin enhancements in the Print segment are anticipated to support overall performance. Although the price target has been adjusted to $27, reflecting a more cautious macro view, the long-term potential and strategic initiatives justify the Buy rating.

Based on the recent corporate insider activity of 35 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.