HP delivered a stellar result, surpassing Wall Street expectations on all fronts but its stock has been under pressure. There are a number of factors driving negativity around the PC giant such as the margin headwinds associated with higher direct costs in the latter half of 2021. There is an expected rise in display, DRAM and NAND flash memory costs as well as logistics costs which could result in lower margins for HP. Also, with the Covid-19 tailwinds receding, there is a rising fear that PC sales have peaked out, leaving the stock with a limited upside in the year. While the results indicated that consumers as well as corporates have continued to buy personal computers despite the ease of pandemic lockdowns, HP’s inventory levels are also high to manage future supply chain issues. Given this scenario, we provide the stock with a ‘Hold’ rating and a relatively conservative target price.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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