HP, Inc. (HPQ): Earnings Preview - Wells Fargo
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Wells Fargo analyst, Maynart Um, reiterated his Outperform rating on shares of HP, Inc. (NYSE: HPQ) and expects FQ4 rev/EPS to be in line with street consensus ($11.8B/$0.37) and at the high end of guidance ($0.34-$0.37).
PCs have been stabilizing and the analyst expects sell-through to be more important heading into 2017. The pace of declines have slowed in Printing and the analyst thinks the impact of recent Yen weakness bears watching.
Despite end-market pressures, the analyst expects HP to manage costs and margin. While there are few catalysts to drive upside, the analyst believes shares also have limited downside risk given FCF generation and a 3.2% dividend yield.
The analyst believes HPQ's strategy to focus on PC profitability, reinvesting into its printer business to drive supplies growth, focus on the A3 market (Samsung acq.), and supplies business model change is the right one though the payback is still further out.
No change to the valuation range of $14 - $15.
Shares of HP, Inc. closed at $15.87 yesterday.
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