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Why HP Stock Topped the Market Today
Key Points
On Friday, an analyst raised his price target on the veteran tech hardware specialist.
This was the latest in a small series of hikes.
Investors were reassessing HP's (NYSE: HPQ) recently published fiscal third-quarter earnings report, and, given that the stock rose on Friday, it seems they've become more bullish on the company's prospects. This was helped by another in a series of post-earnings analyst price target hikes.
The veteran tech hardware company's shares closed that trading session 3% higher, in contrast to the S&P 500 index's 0.2% decline.
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Not willing to go long
Well before market open that day, Barclays pundit Tim Long lifted his HP fair value assessment to $23 per share, notably up from his preceding $19. He's still a bear on the tech stock, however, as he maintained his underweight (i.e., sell) recommendation.
Image source: Getty Images.
According to reports, Long unsurprisingly made his adjustment because of that earnings report. HP did much better than many analysts had projected, with the major caveat that its fundamentals received a big shot in the arm from federal tariff rebates.
In his update, the analyst said that HP's sales of personal systems -- a longtime strength -- were impressive. However, he waxed negative about the company's performance in the printer category, and said its margins were under pressure.
Same as it ever was?
In all likelihood, that tariff situation won't recur, so HP will have to slog it out as a seller of traditional PC hardware and printers. We're long past the growth years of such products, and while the company has done a good job improving the fundamentals regardless, I don't envision any sudden jumps in its business. HP isn't a compelling stock, in my view.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends HP. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.