HP Staying True to Course With Management Expectations to Start Fiscal 2023; Shares Fairly Valued

We maintain our $30 fair value estimate for no-moat HP shares after the firm reported fiscal first-quarter results in line with guidance and reaffirmed its fiscal-year guidance. HP is dealing with soft demand across both personal devices and printing which is slowing sales. Additionally, it is taking the firm’s distributors a few quarters to work through their inventory, which further slows new orders for HP. We see these cyclical dynamics as short-term in nature, but par for the course for a company like HP that plays in commoditylike markets that lack moats in our view. We see shares as fairly valued.