BFA Securities Downgrades HP Inc's Rating to Neutral

In a notable shift within the investment community, BFA Securities has downgraded HP Inc's stock rating from buy to neutral. Analyst Wamy Mohan highlighted concerns regarding the company's print margins, suggesting that they are reverting to lower levels and may negate the potential upside from the burgeoning personal computer (PC) market, including those integrated with artificial intelligence (AI). Mohan pointed out that HP Inc has been experiencing over-earning in its printing segment. He believes that any earnings per share growth in the future will predominantly come from share buybacks rather than organic growth from the core business. Although he maintains a price target of $37 for HP Inc shares, Mohan noted that there are variables that could alter this outlook, including a surge in demand for AI-enabled PCs beyond his current estimates and potential strategic changes under new CFO Karen Park Hill. If HP can effectively adapt to these conditions, it might counterbalance the projected decline in printing margins. This conference is reflective of broader shifts within tech corporations as they navigate the balance between traditional revenue streams and emerging technology trends.