Did JPMorgan’s Downgrade Signal a Turning Point for HP’s (HPQ) Long-Term Growth Prospects?

• On October 22, JPMorgan downgraded HP Inc. to Neutral from Overweight, citing expectations of a difficult PC market environment as the Windows 10 replacement cycle winds down and costs rise.
• This shift reflects wider market concerns about HP’s margins and volumes as macroeconomic headwinds persist and catalysts for consumer PC upgrades become scarcer.
• We'll explore how the analyst downgrade and concerns over the PC market outlook may influence HP's long-term growth and profitability trajectory.

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HP Investment Narrative Recap

HP shareholders need confidence in the company’s ability to generate stable profits and adapt as demand for PCs and printers matures. The recent analyst downgrade, paired with news of a pending $39,000,000 legal settlement, does not materially affect the most important short-term catalyst, which remains AI-driven PC adoption; however, it highlights ongoing risks tied to operational costs and non-core disruptions.

Among recent announcements, the rollout of new Neo:LED commercial monitors and features aimed at remote work stand out. These innovations align with HP’s focus on premium device segments and services, key growth catalysts at a time when traditional hardware cycles face pressure from market saturation and softer consumer replacement activity.

In contrast, investors should remain aware of ongoing structural challenges in HP’s core Print segment, as...

Read the full narrative on HP (it's free!)

HP's outlook anticipates $56.8 billion in revenue and $2.9 billion in earnings by 2028. This is based on a yearly revenue growth rate of 1.3% and a $0.3 billion increase in earnings from the current $2.6 billion.

Uncover how HP's forecasts yield a $28.28 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members estimate HP’s fair value between US$28.27 and US$50.89 per share, reflecting five distinct outlooks. While some anticipate upside from new product initiatives, others caution that ongoing declines in print and hardware demand may hold back consistent gains.

Explore 5 other fair value estimates on HP - why the stock might be worth just $28.27!

Build Your Own HP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your HP research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free HP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate HP's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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