BMO analyst, Tim Long, maintained his Market Perform rating on HP, Inc. (NYSE: HPQ) as its first quarter as a standalone company was in line with expectations. The company is using 75% of its Free Cash Flow for buybacks and dividends but the analyst believes the company could do more. The PT drops by $1 to $12 on multiple compression.

HP reported its first quarterly earnings as a standalone company. Results were mixed, as January quarter revenue of $12.2 billion was below expectations but EPS of $0.36 were in line with Street consensus of $0.36. The Personal Systems business continued to decline, though HPQ gained market share. The Printing business was also down, with management taking some steps to control the hardware, but unable to stabilize supplies in the near term.

HP Inc. reported mixed January quarter results. Revenue was $12.2 billion, compared with consensus estimates of $12.2 billion. EPS was $0.36, compared with consensus $0.36. Gross margin was 18.7% and OpEx of $1.4 billion was in line.

Management is accelerating its restructuring program and increasing FY16 headcount reductions to 3,000, from 1,200 previously. As a result, the restructuring will take place over one year rather than three, as previously planned. The action brings forward a savings run-rate of approximately $300 million into FY17E.

Printer ASP was up Q/Q on a constant currency basis. Although this drove unit declines, management’s action was deliberate, intended to protect margins and drive installed base growth of higher-use models, which will eventually help sell supplies. We like management’s disciplined actions to dampen the impact of a tough market and currency environment on the segment.

The price target of $12, is down from $13, as a result of multiple compression. The new target assumes the stock trades at 7x CY2017 EPS of $1.66.

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Shares of HP, Inc. closed at $10.82 yesterday.