Intel stock extends gains after report of possible U.S. government stake
On Wednesday, BofA Securities adjusted their financial outlook on HP Inc. (NYSE:HPQ), reducing the firm’s price target from $35.00 to $33.00 while maintaining a neutral stance on the stock. Currently trading at $28.34 with a P/E ratio of 10.05, InvestingPro analysis suggests HP is slightly undervalued. The revision comes ahead of HP’s expected fiscal second quarter results, set to be released on May 28th.
The analyst at BofA Securities highlighted a shift in the revenue timeline for HP’s Personal Systems (PS) segment, initially projected to be more heavily weighted towards the second half of the fiscal year. This change is attributed to a demand increase ahead of anticipated tariffs, which now suggests a more even distribution of revenue throughout the calendar year. With revenue of $53.88 billion in the last twelve months and a modest growth of 1.46%, this shift could be significant. This assertion is supported by reports from distributors within the analyst’s coverage area, who observed double-digit percentage growth in their PC divisions in the first calendar quarter.
Despite these changes, BofA Securities has opted to keep gross margin and operating margin estimates unchanged. The firm anticipates that any revenue gains from original equipment manufacturer (OEM) pricing, as a response to tariffs, could be neutralized by potential short-term costs. These costs may arise if HP accelerates its strategy to diversify PC production away from China. With current gross profit margins at 21.85%, InvestingPro data indicates HP faces challenges with weak margins. The analyst also noted that tariffs could pose risks to HP’s full-year guidance unless the company implements additional cost reduction measures.
BofA Securities forecasts HP’s fiscal second-quarter earnings per share (EPS) at $0.78, slightly below the Street’s consensus of $0.81. The neutral rating is reiterated based on the belief that any EPS growth for HP will likely stem from share repurchases, which management has been pursuing aggressively according to InvestingPro analysis. The company also maintains a strong 4.08% dividend yield, having raised dividends for 8 consecutive years. Moreover, potential revenue and operating margin benefits from PC refresh cycles are expected to be counterbalanced by lower operating margins in HP’s Printing segment.
In other recent news, HP Inc. announced a cash dividend of $0.2894 per share for the third quarter of its fiscal year 2025, showcasing its continued financial health and commitment to shareholder returns. The dividend will be paid on July 2, 2025, to shareholders on record by June 11, 2025. Additionally, HP Inc. stockholders approved the election of 13 board members and the compensation of executive officers at the 2025 annual meeting, reflecting strong shareholder confidence in the company’s leadership and governance. The appointment of Ernst & Young LLP as HP’s independent auditor was also ratified with a significant majority.
In a strategic move, HP Inc. reduced its Board of Directors from 15 to 13 members, following the decision of two directors not to stand for re-election. This change was officially documented in an SEC filing. Furthermore, HP Inc. has partnered with Reincubate to enhance video capabilities on its next-generation AI PCs, aiming to improve performance and battery life through advanced AI technology. The partnership highlights HP’s focus on innovation and efficiency.
At the Amplify Conference, HP unveiled a range of AI-driven PCs and quantum-safe printers, including the EliteBook 8 Series and the EliteDesk 8 Series, which promise enhanced productivity and security features. The company also introduced new gaming laptops and AI tools for small and medium-sized businesses, underscoring its commitment to integrating AI across its product lines. These developments reflect HP’s strategic direction and ongoing efforts to deliver innovative solutions to its global customer base.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.