Reasons To Be Bullish On HP

Analysts at Loop Capital Markets initiated coverage of HP Inc. HPQ ahead of the company's earnings report, scheduled to be released after Wednesday's close. Analyst Ananda Baruah initiated coverage of HP's stock with a Buy rating and $23 price target.

HP's printing business, which represents 40 percent of total revenue and 80 percent of total operating profit, is "tracking ahead of its supplies targets" and should see quarter-over-quarter growth in supplies for the foreseeable future, Baruah said. The PC business accounts for the remainder of the business could also benefit from a Windows 10 commercial PC refresh.

HP could also deliver a "materially stronger" revenue profile over time, which would mark an improvement versus the company's own guidance of "flattish +" profile, the analyst added. As such, the stock will ultimately re-rate higher from its current 10x multiple to a range of 12x-14x. The analyst's $23 price target is based on a 13x multiple on his 2019 earnings per share estimate of $1.80.

Here is a quick look at some of the other sell-side rating heading into the earnings print.

• Stifel Nicolaus: Hold rating, $14 price target.
• RBC Capital Markets: Buy rating, $22 price target.
• Jefferies: Hold rating, $18.75 price target.
• Susquehanna: Hold rating, $20 price target.
• BMO Capital Markets: Hold rating, $20 price target.
• Mizuho Securities: Buy rating, $21 price target.

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