By Sam Boughedda
JPMorgan analysts upgraded HP Inc. (NYSE:HPQ) to Overweight and downgraded Dell Technologies (NYSE:DELL) to Neutral in a note to clients on Monday.
The analysts, who maintained the firm's price target on Dell at $47 and raised the HP price target to $35 from $30, said the firm is "looking to turn a corner in relation to the headwinds that have plagued the PC end-market."
The latest data points indicate downstream PC shipments in the first quarter progressed in line with seasonality despite a challenging fourth quarter of 2022, according to the analysts. In addition, they wrote that upstream data points from component suppliers and ODMs point to the likelihood of above seasonal trends in the coming quarters.
"We have found the latest data points in relation to PC shipments reinforcing our view of a 2H recovery," the analysts added.
"While we expect the recovery in the PC end-market to benefit both HPQ and DELL, we are choosing to express our preference for share price upsides through the recovery through a rating change with a time horizon focused on the recovery, which should benefit HPQ more than DELL in our estimates on account of an earlier recovery in PCs as an end-market relative to demand for IT infrastructure products from Enterprises," explained the analysts.