Market Overview

After A 'Breakthrough' Quarter, Did HP Just Become A Growth Company?


After the 2015 split of HP Inc (NYSE: HPQ) and Hewlett Packard Enterprise Co (NYSE: HPE), HP is now “the faster growing sibling,” according to UBS.

The company posted its first simultaneous growth in the PC and printer sectors since the second quarter of 2010, UBS analyst Steven Milunovich said in a Thursday note. HP reported second-quarter results after Wednesday's close.

“Stabilization of the core, free cash flow likely at the top of the $2.3-2.6 billion range and eventual growth in A3 copying and 3D printing keep us optimistic,” Milunovich said.

UBS maintained a Buy on HP and raised its price target from $20 to $22.

‘A Shot At Sustained Revenue Growth’

HP’s second-quarter revenue of $12.4 billion was a 7 percent year-over-year increase, outpacing UBS’ $12 billion estimate.

At the time of the HP and Hewlett Packard split, the latter was viewed as “the growth vehicle” and HP was viewed as “the cash flow company,” the analyst said.

“We recently argued that HP has a shot at sustained revenue growth even with a declining core printer business,” Milunovich said.

The company has rebalanced its product line, with more premium offerings, and declines in the PC market are leveling out, according to UBS. The firm is projecting flat PC revenue for HP in 2017, an estimate that Milunovich said “could prove conservative.”

It could take three to five years for HP to succeed in the copier segment and with the Jet Fusion 3D printer, the analyst said.

“We believe HP’s A3 products offer a compelling value proposition and will gain traction, but the current distribution channel will take time to penetrate.”

Related links:

HP Inc Impresses In Q2, But Concerns Remain

HP Still Has Some Printing Health Concerns 

Latest Ratings for HPQ

Aug 2019MaintainsEqual-Weight
Aug 2019MaintainsBuy
Aug 2019MaintainsEqual-Weight

View More Analyst Ratings for HPQ
View the Latest Analyst Ratings

Posted-In: Hewlett Packard Enterprise Co HP IncAnalyst Color Price Target Analyst Ratings Tech


Related Articles (HPQ + HPE)

View Comments and Join the Discussion!

Latest Ratings

GTYHInitiates Coverage On7.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Seed Fundraising — How to Close the Lead Investor

How The Top 15 Smartphone Apps Have Changed Over The Last Few Years