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A Resurgent Print Segment Drives HP Forward as Supply Chain Concerns Linger on; Raise FVE to $25

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

No-moat HP Inc finished off its third quarter with top- and bottom-line numbers comfortably above our estimates as a resurgence in the printing segment buoyed the firm's top line forward. As enterprises gradually implement return-to-office plans across the globe, we expect an uptick in commercial print revenue for HP--an area particularly affected by the COVID-19 pandemic. Once again, management highlighted the supply-demand imbalance currently present in the market, with HP's revenue being limited by supply chain constraints despite having willing buyers for their products. Despite the supply chain concerns, we raise our fair value estimate to $25 per share from $23 per share, as we expect them to abate over the next year. With shares down 4% to $28 per share, we think HP is currently fairly valued.

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Company Profile

Business Description

HP Inc. is a leading provider of computers, printers, and printer supplies. The company's three operating business segments are its personal systems, containing notebooks, desktops, and workstations; and its printing segment which contains supplies, consumer hardware, and commercial hardware; and corporate investments. In 2015, Hewlett-Packard was separated into HP Inc. and Hewlett Packard Enterprise and the Palo Alto, California-based company sells on a global scale.

Contact
1501 Page Mill Road
Palo Alto, CA, 94304
T +1 650 857-1501
Sector Technology
Industry Computer Hardware
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type Cyclical
Employees 53,000

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