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HP Inc Had 'Some Good, Some Bad'

Hewlett-Packard Company NYSE:HPQ - HP Inc Had 'Some Good, Some Bad'

Barclays expects HP Inc HPQ 4.79% shares to be under pressure in the near term, as pull-forward of divestiture gains into the July quarter and disappointing printing trends contribute to a softer EPS guide for October's quarter.

HP Inc reported revenue and non-GAAP EPS of $11.9 billion and $0.48, versus Barclays estimates of $11.1 billion and $0.45. The company guided October quarter non-GAAP EPS to a range of $0.34–$0.37, below Barclays' estimate of $0.41.

HP Inc's printing revenue declined 14 percent year-over-year.

"While HP expects the channel glut to ease by the end of F2017, we think it will test investors' patience as other self help stories may have more immediate inflection points," analyst Mark Moskowitz wrote in a note.

Moskowitz reiterated his Equal-Weight rating and raised his price target by $1 to $14. Following the results, the analyst cut his October quarter non-GAAP EPS to $0.37 from $0.41, but raised his C2016 non-GAAP EPS estimate to $1.66 from $1.64.

"We still believe HP Inc. is a quality holding for capital-focused investors. While the near term could be bumpy, the headwinds related to printing supplies are explainable and have an end point for resolution, albeit deferred to the mid to long-term. We recommend holding the stock but not as an outsized or overweight position," Moskowitz continued.

Shares of HP Inc closed Wednesday's regular trading at $14.40. In the pre-market hours on Thursday, the stock fell 5.90 percent to $13.55.

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