HP Stock Pops on Earnings Beat, Strong Outlook: What To Know
HP shares are soaring Thursday after the PC maker beat earnings expectations and issued solid guidance for its fiscal third quarter.
HP (HPQ) stock is soaring Thursday after the PC and printer company beat revenue and earnings expectations for its fiscal second quarter and issued solid guidance for its fiscal third quarter.
In the three months ended April 30, HP said its revenue slipped 0.8% year-over-year to $12.8 billion, pressured by an 8% drop in printing net revenue. Still, HPQ saw revenue in its personal systems segment, its biggest contribution to total revenue, rise 3% from the year prior to $8.4 billion.
The company also said earnings per share (EPS) were up 3.8% from the year-ago period, to 82 cents.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We delivered a solid quarter and first half, and unveiled an innovative portfolio of solutions designed for the AI [artificial intelligence] and hybrid era," HP President and CEO Enrique Lores said in a statement. "We have a clear strategy and are well positioned to drive profitable growth across our business."
The results beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $12.6 billion and earnings of 81 cents per share.
For HPQ's fiscal third quarter and full year, the company expects earnings per share to arrive in the range of 78 cents to 92 cents and $3.30 to $3.60, respectively. HPQ had previously provided a range for earnings of $3.25 to $3.65 per share for the full year.
HP's outlook satisfies analysts' expectations, which called for earnings of 85 cents per share in the fiscal third quarter and $3.43 per share for the full year, according to Yahoo Finance.
Is HPQ stock a buy, sell or hold?
The tech stock has posted a strong performance so far in 2024, rising about 24% for the year to date as of this writing. Still, UBS Global Research analyst David Vogt maintained a Neutral (Hold) rating on HPQ after earnings.
"While the results were slightly better than expectations, we think that the tempered outlook for the remainder of HP's fiscal year makes sense given the soft yen dynamic and a recovery in PC taking longer than expected, especially as the market awaits wider availability of AI PCs," Vogt wrote in a note to clients.
Still, the analyst thinks these headwinds will start to recede at the start of HPQ's upcoming fiscal year "as AI PCs begin to ramp during the holiday season, the Windows refresh cycle accelerates, and the yen's weakness abates."
Overall, most analysts remain upbeat to the former member of the Berkshire Hathaway equity portfolio. According to S&P Global Market Intelligence, the consensus recommendation among the 16 analysts following the stock that it tracks is a Buy.
However, analysts’ price targets have struggled to keep up with HPQ's rally this year. Currently, the average price target price for HPQ stock is $34.07, a discount of about 8% to current levels.
Related Content
-
We inherited $250K: should we buy a second home or save for college?He wants a vacation home, but she wants a 529 plan for the kids. Who's right? The experts weigh in.
-
The $300,000 Social Security Decision You Could Get WrongDeciding when to claim Social Security is a complex, high-stakes decision that shouldn't be based on fear or simple break-even math.
-
4 Ways Washington Could Put Your Retirement at RiskLegislative changes, such as shifting tax brackets or altering retirement account rules, could affect your nest egg, so it'd be prudent to prepare. Here's how.
-
I'm a Financial Adviser: This Is the $300,000 Social Security Decision Many People Get Wrong
Deciding when to claim Social Security is a complex, high-stakes decision that shouldn't be based on fear or simple break-even math.
-
4 Ways Washington Could Put Your Retirement at Risk (and How to Prepare)
Legislative changes, such as shifting tax brackets or altering retirement account rules, could affect your nest egg, so it'd be prudent to prepare. Here's how.
-
2026's Tax Trifecta: The Rural OZ Bonus and Your Month-by-Month Execution CalendarReal estate investors can triple their tax step-up with rural opportunity zones this year. This month-by-month action plan will ensure you meet the deadline.
-
Is Your Retirement Plan Built for 2026 — or Stuck in 2006?It's time to move away from the 4% rule and the 60/40 portfolio to an adaptable, tax-diversified strategy focused on reliable income and longevity.
-
Filed for Social Security Too Soon? 2 Ways to Get a Do-OverIf you've claimed Social Security too soon, two SSA rules allow a do-over. But be warned: Using them clumsily can lead to surprise repayments or lost benefits.
-
Have You Aligned Your Tax Strategy With These 5 OBBBA Changes?Individuals and businesses should work closely with their financial advisers to refine tax strategies this season in light of these five OBBBA changes.
-
Stocks Close Down as Gold, Silver Spiral: Stock Market TodayA "long-overdue correction" temporarily halted a massive rally in gold and silver, while the Dow took a hit from negative reactions to blue-chip earnings.
-
The New Fed Chair Was Announced: What You Need to KnowPresident Donald Trump announced Kevin Warsh as his selection for the next chair of the Federal Reserve, who will replace Jerome Powell.
