HP (HPQ) will likely report strong fiscal Q2 margins in the personal system and print divisions driven by its cost management actions, BofA Securities said in an earnings preview Thursday.
BofA said it expects revenue of the personal computer division to be weak in the near term with a potential recovery in H2.
The company’s print division will face revenue headwinds due to soft demand in China and a tough pricing environment amidst a weakening Yen, which favors HP’s competitors, according to the preview.
The firm expects HP’s fiscal Q2 earnings per share to align with the mid-point of company guidance between $0.76 and $0.86 and street estimates of $0.81. BofA anticipates Q2 revenue of $12.5 billion for the quarter, below estimates of $12.6 billion, and raised its 2025 revenue outlook to $55 billion from $53 billion based on personal computer momentum into 2025.
HP’s fiscal Q2 earnings are slated for May 29.
The firm said HP’s shares remain attractive due to the improving outlook for its personal computer business, the profitability of print projects, effective cost management and increasing free cash flow.
BofA raised the price objective on HP’s stock to $35 from $32 and reiterated its buy rating.