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On Thursday, Evercore ISI adjusted its price target for HP Inc (NYSE:HPQ), reducing it to $29.00 from the previous $32.00, while maintaining an Outperform rating on the company’s shares. The adjustment followed HP’s mixed performance in the April quarter, which included a slight revenue beat but earnings per share (EPS) that fell short of Wall Street expectations. The company reported $13.2 billion in revenue and $0.71 EPS, compared to the consensus of $13.1 billion and $0.80 EPS, respectively. According to InvestingPro data, HP currently trades at $27.20 with a P/E ratio of 9.81, suggesting the stock is undervalued relative to its Fair Value.
The revenue increase was attributed to approximately 8% year-over-year growth in the Personal Systems segment, with total units up by 6%. This was seen as a result of strong demand due to Windows OS refresh tailwinds within the Commercial sector. However, this was offset by a 3% year-over-year constant currency decline in the Printing division, with Supplies revenue also down by 3% at constant currency. With total revenue reaching $53.88 billion in the last twelve months, HP maintains its position as a prominent player in the Technology Hardware sector. InvestingPro analysis reveals 10+ additional insights about HP’s market position and financial health, available to subscribers.
Management at HP Inc has revised its fiscal year 2025 EPS outlook to a range of $3.00 to $3.30, a reduction of $0.45 at the midpoint. Additionally, the free cash flow (FCF) guidance has been lowered by approximately $600 million at the midpoint. These changes are in response to the challenges posed by global trade policies and their impact on the macroeconomic and demand environment. Consequently, the company has also adjusted its growth expectations for the Personal Systems and Printing markets. Despite these challenges, HP maintains a strong dividend yield of 4.26% and has maintained dividend payments for 55 consecutive years, as highlighted in InvestingPro’s comprehensive analysis.
Despite these revised projections, HP anticipates an increase in year-over-year EPS and FCF in the second half of fiscal year 2025. The fourth quarter of October is expected to show an improvement in EPS, driven by cost savings from the company’s Future Ready program, which is on track to achieve at least $2 billion in gross run-rate savings by the end of FY25, and efforts to mitigate tariffs, including supply chain adjustments and planned price increases in the third quarter. The company’s financial health score of "GOOD" from InvestingPro supports management’s optimistic outlook, with detailed analysis available in the Pro Research Report, part of the comprehensive coverage of 1,400+ US equities.
Evercore ISI believes that HP’s updated guidance is a cautious approach in light of the current tariff and macroeconomic challenges. The firm expects that the company will be able to stabilize EPS and FCF on a year-over-year basis in the second half of FY25. Despite the headwinds, HP’s cost control measures and tariff mitigation strategies are seen as key factors in achieving this stabilization.
In other recent news, HP Inc. reported its financial results for the second quarter of 2025, revealing a mixed performance. The company’s earnings per share (EPS) came in at $0.71, missing analyst expectations, while revenue exceeded projections, reaching $13.2 billion. This earnings miss was attributed to higher-than-anticipated tariff costs impacting the Personal Systems segment. Despite this, HP experienced a 7% year-over-year growth in Personal Systems revenue, aligning with expectations and benefiting from a slight demand increase.
Analysts have responded to these developments by adjusting their outlooks. Citi reduced HP’s stock price target from $29.00 to $27.50, maintaining a Neutral rating, citing a more subdued PC industry outlook. JPMorgan also lowered its price target to $27 from $30, while maintaining an Overweight rating, due to macroeconomic challenges affecting revenue expectations. Goldman Sachs further cut its price target to $26 from $33, maintaining a Neutral rating, following the earnings shortfall.
HP is actively working to mitigate tariff impacts by diversifying its supply chain and adjusting pricing strategies. The company anticipates neutralizing these headwinds by the fourth quarter of fiscal 2025. Additionally, HP has launched an AI-driven PC portfolio, aiming to capture a significant portion of the PC market by year-end. Despite these efforts, the unpredictable tariff environment and macroeconomic uncertainties continue to pose challenges for HP’s growth projections.
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