HP Inc. (NYSE: HPQ): Stock That Needs Special Handling


    Dodge & Cox recently announced the acquisition of new stake in HP Inc. (NYSE:HPQ). The institutional investor has increased its shareholding in the Technology company by 18.51% to 182.89 million shares with purchase of 28.57 million shares. This fresh investment now brings its stake to 12.79% valued currently at $3.22 billion. In addition, BlackRock Fund Advisors raised its holdings by 14.87 million to 85.29 million shares. And Fidelity Management & Research Co.. has lifted its position by 5.70% or 1.39 million shares – to 25.83 million shares.

    With over 22.57 million HP Inc. (HPQ) shares trading Friday and a closing price of $19.85 on the day, the dollar volume was approximately $448.06 million. The shares have shown a positive weekly performance of 8.89% and its price on 08/28/20 gained nearly 6.15%. Currently, there are 1.44B common shares owned by the public and among those 1.43B shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 17 analysts who have offered their price forecasts for HPQ have a consensus price objective of $19.63. The analysts have set the share’s price value over the next 12 months at a high of $25.00 and a low of $13.00 should the stock experience a downside. Incidentally, analysts’ outlook for the HP Inc. stock is 2.70 for the next 12 months. The average price target is -11.58% below its last price level and a downside to the estimated low will see the stock lose -52.69% over that period. But an upside of 20.6% will see the stock hit the forecast high price target while mean target price for the stock is $20.00.

    Insiders at the company have transacted a total of 61 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 34 of these insider trades were purchases, accounting for 2,246,866 shares. Insider sales of the common stock occurred on 27 occasions, with total insider shares sold totaling 1,192,807 shares.

    The top 3 mutual fund holders in HP Inc. are Dodge & Cox Funds – Stock Fund, Vanguard Total Stock Market Index, and Vanguard 500 Index Fund. Dodge & Cox Funds – Stock Fund owns 111.2 million shares of the company’s stock, all valued at over $1.95 billion. The company bought an additional 17.5 million shares recently to bring their total holdings to about 7.78% of the shares outstanding. Vanguard Total Stock Market Index sold -0.11 million shares to see its total holdings shrink to 40.62 million shares valued at over $714.16 million and representing 2.84% of the shares outstanding. Vanguard 500 Index Fund sold -0.18 million shares to bring its total holdings to over 29.48 million shares at a value of $518.27 million. Vanguard 500 Index Fund now owns shares totaling to 2.06% of the shares outstanding.

    Shares of HP Inc. (NYSE: HPQ) opened at $19.28, up $0.58 from a prior closing price of $18.70. However, the script later closed the day at $19.85, up 6.15%. The company’s stock has a 5-day price change of 8.89% and 31.20% over the past three months. HPQ shares are trading -3.41% year to date (YTD), with the 12-month market performance up to 9.73% higher. It has a 12-month low price of $12.54 and touched a high of $23.93 over the same period. Currently, 22.57 million shares have been traded, compared to an average intraday trading volume of 13.87 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 8.56%, 12.75%, and 8.16% respectively.

    Institutional ownership of HP Inc. (NYSE: HPQ) shares accounts for 81.10% of the company’s 1.44B shares outstanding. Mutual fund holders own 32.36%, while other institutional holders and individual stakeholders account for 48.76% and 0.36% respectively.

    It has a market capitalization of $26.74B and a beta (3y monthly) value of 0.96. The stock’s trailing 12-month PE ratio is 11.20, while the earnings-per-share (ttm) stands at $1.77. The company has a PEG of 1.21 and a Quick Ratio of 0.50. Price movements for the stock have been influenced by the stock’s volatility, which stands at 3.26% over the week and 2.64% over the month.

    Analysts forecast that HP Inc. (HPQ) will achieve an EPS of $0.52 for the current quarter, $0.54 for the next quarter and $2.38 for 2021. The lowest estimate earnings-per-share for the quarter is $0.51 while analysts give the company a high EPS estimate of $0.54. Comparatively, EPS for the current quarter was $0.6 a year ago. Earnings per share for the fiscal year are expected to increase by 15.10%, and 8.87% over the next financial year. EPS should grow at an annualized rate of 9.24% over the next five years, compared to 5.70% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 17 brokerage firm advisors rate HP Inc. (HPQ) as a “Moderate Buy” at a consensus score of 2.70. Specifically, 4 Wall Street analysts polled rate the stock as a buy, while 11 of the 17 advise that investors “hold,” and 1 rated it as a “Sell.”

    Looking at the support for the HPQ, a number of firms have released research notes about the stock. UBS stated their Neutral rating for the stock in a research note on August 28, 2020, with the firm’s price target at $17-$18. Morgan Stanley coverage for the HP Inc. (HPQ) stock in a research note released on August 28, 2020 offered a Equal-Weight rating with a price target of $20. Loop Capital was of a view on August 28, 2020 that the stock is Buy, while Cowen gave the stock Market Perform rating on August 28, 2020, issuing a price target of $18- $20. Citigroup on their part issued Neutral rating on August 28, 2020.


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