HP Earnings: PC Recovery Becoming More Visible; Raising Our Fair Value Estimate

No-moat HP reported OK fiscal third-quarter earnings, which had similar themes to the previous quarter. The recovery in PC-related revenue continued, while the printing business remained under pressure. As we adjust our forecasts, we are increasing our fair value estimate to $32 from $31, largely driven by slightly higher PC growth assumptions as we give a bit more credit for growth driven by the upcoming PC refresh cycle. We went into earnings viewing the stock as slightly overvalued (roughly 15%), and with shares down roughly 4% after hours (we think largely driven by weaker growth and margins in printing) in combination with our 3% fair value raise, we now view shares as approximately fairly valued.