HP Analyst Lauds PC Maker For Executing On Positive Mix Shift Following Q1 Print

HP Inc. (NYSE: HPQ) reported better-than-expected quarterly results, and an analyst at Wells Fargo Securities commended the company for a positive quarter.

The HP Analyst: Aaron Rakers maintained an Equal-Weight rating and $35 price target on HP shares.

The HP Thesis: HP delivered amid concerns over slowing/choppy PC demand dynamics and increasing print supply constraints that is expected to last through 2022, Rakers said.

Revenues at the Personal Systems Group climbed 15% year-over-year, ahead of the consensus estimates, while Imaging and Printing Group saw revenues fall 4.2%.

"We believe a notable takeaway from HP's results is the company's execution on a positive mix shift — e.g., commercial PCs, premium consumer PCs, gaming PCs, and peripherals," the analyst wrote in the note.

Related Link: 12 Emerging Technologies To Watch In 2021

The company also increased its 2022 earnings per share guidance and reiterated its free cash flow guidance, the analyst noted. Among the business segments, HP is calling for a high-single-digit revenue decline for PSG in the second quarter, he added.

Favorable pricing will likely push margins of IPG above the 16-18% range, Rakers said.

HP Price Action: At last check, HP shares were slipping 0.5% to $34.23.