HP Earnings: PC Demand Improving but It Remains Soft; Difficult Macroenvironment Persists

We maintain our $30 fair value estimate for no-moat HP after it reported fiscal third-quarter results that exceeded the high end of its guidance range. Management provided fiscal fourth-quarter guidance that was below our previous expectations as the difficult macroenvironment has persisted longer than anticipated, resulting in a more moderate outlook for HP’s fiscal 2023 earnings. The turning point that HP expected has yet to be realized and cost discipline actions remain in place. We reiterate our view that markets will rebound in the medium term but still view HP’s offerings as lacking a long-term moat and we view shares as fairly valued.