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.