An improving PC outlook and increased profitability are set to balance out near-term macro pressures for this technology firm, according to Bank of America.
Growth in long-term fundamentals should outweigh short-term headwinds for HP , according to Bank of America. The bank double upgraded shares of the technology company to buy from underperform rating on Tuesday. It also lifted its price target to $33 from $25. The new forecast points to more than 28% upside potential from HP's Monday closing price of $25.67. Shares of HP are down more than 4% since the start of the year.
HPQ YTD mountain HPQ ytd chart Despite a weaker near-term macro backdrop due to softer demand in China and rising competition from Japanese peers, Mohan pointed to HP's strong fundamentals as catalysts for the upgrade. The analyst cited tighter cost controls, growth from an improving PC outlook and increased operating profit dollars. "In our opinion, this multiple is justified given it balances near-term pressures the company is facing vs. long term opportunities," he wrote.
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