Analyst Note| Mark Cash |
No-moat HP Inc.'s shares soared higher than 15% after Berkshire Hathaway disclosed it owns about 121 million HP shares, or about 11% of HP. Berkshire poses a stout record of investing in firms it views as having long-term appreciation potential, and we think HP fits the bill for being a value play within the technology sector. However, we remain cautious about demand reverting and normalizing as HP has been an outsized beneficiary of record PC demand stemming from remote working and schooling. In turn, we maintain our $29 fair value estimate and see shares as overvalued.