BofA Securities raised its price target on HP Inc to $21 from $18, citing tariff refunds and an improved outlook for the company’s Personal Systems and Printing divisions.
The new target, disclosed Thursday, comes as HP reported fiscal third-quarter revenue of $15.7 billion, exceeding Wall Street estimates of $14.4 billion and $14.34 billion. Adjusted earnings per share reached $0.83, surpassing forecasts of $0.66. Quarterly revenue grew 13% year-over-year.
HP’s stock, which closed at $30.52, remains below its 52-week high of $32.19. The company’s price-to-earnings ratio stands at 11.11, while its free cash flow yield is 14%. Over the past six months, shares have gained 65%.
BofA maintained its Underperform rating on HP, despite the target increase. The firm highlighted strengths in pricing execution, adoption of premium and AI-equipped PCs, market share gains, and resilience in the Printing division’s profitability. However, challenges persist, including slower unit growth in PCs, pressure on core margins excluding tariffs, and an expected decline in the Personal Systems operating margin in the fourth quarter compared to the third.
Tariff refunds contributed $0.11 to third-quarter EPS and are expected to add $0.19 to the company’s fiscal 2026 EPS guidance revision. The updated full-year EPS range for fiscal 2026 is now $3.19 to $3.29, up from prior guidance. Free cash flow is projected between $3.0 billion and $3.2 billion.
BofA noted risks including price elasticity demand from higher prices, rising memory costs, and uncertainty surrounding leadership transitions.
