HP shares drop after analyst downgrade

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On Friday, HP($NYSE:HPQ)’s stock dropped after investment firm Wells Fargo downgraded the company, noting that there is an “increasing scenario” where HP’s shares will underperform the rest of this year and into 2023, due to weakening demand for PCs. Analyst Aaron Rakers lowered his rating on HP shares to underweight from equal weight and cut his price target to $30 from $35. Rakers noted that while HP has strong free cash flow and is executing well, a “deteriorating PC demand and macro sensitivity in print could result in material downward estimate revisions.” As such, Rakers lowered his 2023, 2023 and 2024 estimates. This news could affect HP’s market and earnings in the long term.

Share Price

On Friday, HP stock opened at $34.6 and closed at $34.2, after analyst downgrade. This caused a drop in HP shares.

VI Analysis

Company’s fundamentals reflect its long term potential, below analysis on HP are made simple by VI app. According to VI Risk Rating, HP is a medium risk investment in terms of financial and business aspects. You may check out what are the business and financial areas presenting potential risks in our website. However, the company’s fundamentals suggest that it has the potential to be a long-term investment.

Summary

The downgrade comes as HP is set to report its fiscal first-quarter results on Wednesday. Analysts at Citigroup downgraded HP from “neutral” to “sell,” citing concerns about the company’s exposure to weak macroeconomic conditions. “We think that HP’s revenue and earnings are at risk of further downside in the near term, as the company is facing weak macroeconomic conditions, particularly in Europe,” the analysts wrote in a research note. The downgrade from Citigroup comes as HP is set to report its fiscal first-quarter results on Wednesday. HP is facing weak macroeconomic conditions, particularly in Europe, which could impact its results. Investors should be aware of these risks when considering an investment in HP.