HP Earnings: Recovery Outlook Looks Softer After Weak Start to the Year

We lower our fair value estimate for no-moat HP to $27 from $30 per share as we cut our short-term revenue estimates. HP’s end demand still looks soft, and we no longer model a significant recovery in fiscal 2024. PC sales continue to look challenged after the pandemic-driven demand surge of 2021, and we believe printing still looks like a market in secular decline. We expect HP to return to stable, low growth after fiscal 2024, but we no longer model a more meaningful recovery from these levels. HP’s profitability and cash flow have been positive of late, but we expect these to revert to lower levels in the longer term. We see shares as fairly valued.