UPDATE: Wells Fargo Upgrades HP, Inc. (HPQ) to Outperform

Wells Fargo upgraded HP, Inc. (NYSE: HPQ) from Market Perform to Outperform.

Analyst Maynard Um comments "We upgrade HPQ from 2 to 1 as 1) we believe investors are underappreciating the potential for supplies growth on a reported basis in FH2, 2) believe investors are underappreciating the fact that HPQ’s higher margin growth portfolios are now reaching scale, which will help drive margin expansion (or, at the least, provide another lever), 3) future growth areas are starting to generate revs, becoming less dilutive over time (3D printing & A3 investments are $0.05 dilutive) and 4) commodity tightness should continue to help HPQ PC market share (mgmt seemed confident in its ability to procure). As the “core, growth, future” strategy continues to play out, we see scope for margin and profit upside above the lower end of HPQ’s long term target range of 8%-10% (every 10bps of margins is $0.02 in EPS), which we expect will result in further multiple expansion. We believe Street ests (and our prior) were underestimating supplies growth in FH2; raise F17E EPS to $1.64 from $1.61 (guide: $1.55-$1.65; Street: $1.60) on higher supplies and F18E to $1.68 from $1.65 (believe this may still be conservative; Street: $1.68)."

For an analyst ratings summary and ratings history on HP, Inc. click here. For more ratings news on HP, Inc. click here.

Shares of HP, Inc. closed at $17.35 Friday.

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