HP Earnings: Slow PC Recovery Underway As We Maintain Our $30 Fair Value Estimate

We maintain our $30 fair value estimate for shares of no-moat HP after it reported decent fiscal fourth-quarter results. HP’s fiscal 2023 was afflicted by weak demand across both PCs and printing in what we see as a correction from immense pandemic-era demand in 2021. We’re encouraged to see sequential improvement to end the fiscal year, and expect a continuing recovery through fiscal 2024. In our view, rebounding PC demand should drive growth in fiscal 2024 and beyond, as we believe printing sales will continue a slow perpetual decline. We see shares as modestly undervalued after a 3% selloff on tepid guidance for the January quarter.