• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Stock

HSBC downgrades HP Inc to ‘hold’ on cost pressures, trims price target

by November 29, 2024
written by November 29, 2024

Investing.com — HSBC downgraded HP Inc (NYSE:HPQ) to “hold” from “buy,” given the near-term cost pressures in the PC segment that are expected to weigh on profitability in the first half of fiscal 2025.

Brokerage also lowered its price target for the stock to $38 from $39.

HP’s fourth-quarter results were largely in line with consensus but exceeded HSBC’s expectations for operating and net profit due to stronger margins and lower-than-expected interest expenses. Adjusted earnings per share were 5% ahead of HSBC’s estimates and aligned with market expectations.

Revenue grew 1.7% year-on-year, driven by a 5% increase in the commercial PC business, offset by a 4% decline in the consumer PC segment and flat growth in printing. However, operating margins in the PC segment fell to 5.7%, as HP faced higher commodity costs.

HP anticipates mid-single-digit growth in the PC market in 2025, driven by the adoption of AI-enabled PCs, which accounted for over 15% of shipments in the fourth quarter. The company expects AI PCs to make up 20% of its shipments next year. However, the print segment is forecast to decline by low-single digits.

“HP expects cost pressure to continue in the first half of next year and this, in addition to seasonality, was one of the key drivers of weak outlook,” HSBC noted, adding that HP management expects a recovery in the second half, aided by a PC refresh cycle and stronger commercial demand.

HSBC pointed to positive longer-term drivers such as the Windows 11 transition and higher demand for AI personal computers but noted near-term cost challenges.

The new price target implies a 2.8% downside for HP shares.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Turkey stocks higher at close of trade; BIST 100 up 0.12%
next post
Greece stocks lower at close of trade; Athens General Composite down 0.74%

You may also like

BASF results down on impairments, restructuring

January 27, 2025

European chipmakers slump as traders gauge DeepSeek AI...

January 27, 2025

Nasdaq futures tumble as China’s AI push rattles...

January 27, 2025

China Vanke’s CEO, chairman resign amid growing liquidity...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Italy’s MPS shares fall ahead of Mediobanca board...

January 27, 2025

British Land stock drops following stake sale

January 27, 2025

UMG shares rally after new multi-year pact with...

January 27, 2025

BASF shares indicated 3% lower as impairments drag...

January 27, 2025

Ryanair cuts 2026 traffic forecast amid ongoing Boeing...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 5, 2025
    • This California startup is cleaning water and removing CO₂ from the atmosphere — all at a reduced cost

      June 5, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (504)
    • Stock (6,426)

    Latest News

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

    Popular News

    • Nvidia increases China hiring with focus on AI-driven cars- Bloomberg
    • Analysis-After Australia legislated a teen social media ban, it has to figure out how to enforce it

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy