Morgan Stanley Cuts HP Target to $16, Sees 14% EPS Downside
Morgan Stanley cut HP’s price target to $16 from $18, maintaining an underweight rating and projecting over 14% downside to FY26 EPS guidance. HP reported Q1 EPS of $0.81 and revenue of $14.44 billion, topping consensus, while reaffirming FY26 EPS of $2.47–2.77 GAAP and $2.90–3.20 non-GAAP.
1. Price Target Revisions
Morgan Stanley lowered its price target on HP from $18 to $16 and kept an underweight rating, citing modest guidance cuts and ongoing input cost pressure. The firm anticipates more than 14% downside to FY26 EPS estimates. Evercore ISI also reduced its target to $20 from $22 while maintaining an in-line rating.
2. Strong Q1 Results
HP delivered Q1 EPS of $0.81 versus consensus of $0.77 and revenue of $14.44 billion compared with $13.93 billion expected. Growth was driven by robust performance in Personal Systems and AI PCs, reflecting disciplined execution of its Future of Work strategy despite industry headwinds.
3. Fiscal 2026 Outlook
HP reaffirmed its fiscal 2026 guidance with GAAP EPS of $2.47–2.77, non-GAAP EPS of $2.90–3.20, and free cash flow of $2.8–3.0 billion. The company expects results at the lower end of these ranges due to added costs from U.S. trade regulations and associated mitigations.