HP Inc. is set to report third-quarter earnings after the market close on Wednesday, with consensus estimates calling for adjusted earnings of $0.66 per share on revenue of $14.34 billion.
The outlook reflects a 12% year-over-year decline in profit despite nearly 3% revenue growth, with earnings expected to fall 23% from the prior quarter’s $0.86 per share. Analysts have trimmed estimates by 4.7% over the past two months, though HP handily beat expectations by more than 21% in the prior quarter.
The Personal Systems segment, which includes AI-enabled PCs, posted 13% year-over-year growth last quarter, offsetting a 10% decline in consumer printing while total printing revenue remained flat. Rising costs for memory chips, resin, and transportation continue to pressure margins, according to company disclosures.
Wall Street remains divided on HP’s valuation. The stock, trading at $29.52, carries a mean price target of $27.32, implying nearly 7.5% downside. Morgan Stanley cut its target to $17 from $19 with a sell rating, while Goldman Sachs raised its target to $21 from $19. Among 17 analysts, only two rate the stock a buy, five recommend selling, and the remainder maintain neutral ratings.
HP launched HP Care Complete with Asurion in August as a device-protection subscription, aiming to diversify revenue beyond hardware sales. The company’s forward earnings multiple stands at 9.7 times, with a trailing multiple of 10.6, and long-term projected EPS expansion of 14%.
Shares have surged 60% over the past six months, reaching a 52-week high of $32.19, underscoring investor optimism around AI-driven demand despite ongoing margin headwinds.
