NEW YORK — HP Inc. (HPQ) shares fell 2.8 percent on July 24 after the company reported first-quarter results showing uneven performance across its core segments. The drop reflected investor uncertainty about the pace of enterprise PC refreshes and continued softness in consumer demand. Revenue came in within guidance but offered none of the acceleration bulls had hoped for.
The Personal Systems division remains the central debate. Commercial PC sales grew modestly, driven by Windows 11 upgrades and early AI PC adoption among large enterprises. Consumer PC revenue remained a drag as households cut discretionary spending. JPMorgan analyst Sam Smith reiterated a Hold rating with a $32 price target, saying the AI PC catalyst needs more time to generate meaningful volume.
The Printing segment held up better. Commercial hardware sales edged higher and supplies revenue stayed steady. Overall gross margins expanded 40 basis points year over year to 21.5 percent, helped by supply chain efficiencies and a favorable product mix — a real cushion when top-line growth is choppy.
For value investors, the capital return story is the anchor. HP returned $1.1 billion to shareholders in Q1 through dividends and buybacks. CEO Enrique Lores said the company is targeting $3.2 billion to $3.6 billion in free cash flow for the full fiscal year.
Truist Securities analyst John Doe upgraded HPQ to Buy from Hold with a $38 price target. Doe argues the stock trades below intrinsic value given its stable cash flows and the potential for a stronger second-half PC recovery. He said the market underprices HP's long-term opportunity in subscription services and hybrid work solutions.
Morgan Stanley analyst Jane Roe held her Underweight rating with a $27 price target. Roe pointed to persistent macroeconomic pressure on small and midsize businesses as a risk to the commercial PC refresh cycle, and flagged aggressive competitor pricing in the consumer market as a threat to HP's share.
