FBN Securities initiated coverage on HP, Inc. (NYSE: HPQ) with a Sector Perform rating and a price target of $13.50.

Analyst Shebly Seyrafi said, "Key positives include a strong recurring revenue from supplies (about a quarter of HPQ’s revenue and a larger percentage of operating profits), a very negative cash conversion cycle (CCC), large TAMs ($230B+ in printing (A4) and $340B+ in personal systems), opportunities to penetrate the copier (A3) market, the ability to penetrate the office printing market with inkjets (ink in the office) by leveraging its PageWide technology, opportunities (and challenges) in the 3D printer market (which HPQ expects to enter next year), and a stabilizing PC market due to an easier comp in F2016 (as F2015 faced a tough comp due to the end of support for Windows XP in early 2014), benefits from Windows 10 ramping (noting that Windows 10 sentiment is now 75%, 25pp higher than Windows 8), and new Intel Skylake processors helping driver better performance. Key concerns include continued strong competition in printing (especially from Japanese competitors Canon and Epson), slow-growing TAMs (CAGRs of LSD% in printing and 4% in personal systems), currency, and strong competition in the 3D printer market, a market where investors have not been rewarded recently from their investments in DDD, SSYS or VJET."

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Shares of HP, Inc. closed at $14.64 yesterday.