HP Continues To Navigate Past Supply Constraints; Maintain $29 Fair Value Estimate

No-moat HP reported impressive first-quarter fiscal results, with top- and bottom-line figures above our expectations, led by continued strength in the personal systems vertical. The continued supply-demand imbalance within the market predominantly impacted the HP print segment over the first quarter, resulting in uncaptured revenue from supply chain constraints paired with a growing backlog of demand for products. We are maintaining our fair value estimate of $29 per share, as we expect growth within fiscal 2022; however, we remain cautious of long-term demand for current supply-constrained products after near-term market imbalances normalize. Shares fell about 2% after hours and we still view shares as overvalued.