What Happened?
Shares of personal computing and printing company HP (NYSE: HPQ) fell 2.6% in the morning session after Evercore ISI downgraded the stock's rating to 'In Line' from 'Outperform', citing concerns about future demand.
The investment firm believes much of HP's recent PC strength may be temporary, potentially driven by customers buying ahead of anticipated tariffs, which could create risks for demand estimates in 2026. Evercore ISI kept its price target at $29, noting the stock is already trading around that level and that a clear path to higher earnings is unlikely in the near term. The downgrade also flagged other challenges, including persistent headwinds in the company's printing division and the potential for increased competition from Dell.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy HP? Access our full analysis report here, it’s free.
What Is The Market Telling Us
HP’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock gained 4.1% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
HP is down 12.6% since the beginning of the year, and at $28.37 per share, it is trading 27.8% below its 52-week high of $39.30 from November 2024. Investors who bought $1,000 worth of HP’s shares 5 years ago would now be looking at an investment worth $1,492.
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