BofA Securities analysts upgraded HP (NYSE:HPQ) from Underperform rating to Buy with a $33.00 price target. As a result, shares gained more than 2% intra-day today.
This upgrade comes after HP shares fell nearly 25% since July due to the company’s lowered EPS and FCF guidance linked to a delayed PC recovery. Additionally, Berkshire Hathaway, led by Warren Buffett, has reduced its stake in HP recently.
The bank’s decision is based on several factors, including the expectation that HP will reach a bottom in its free cash flow during the fiscal year 2023, an anticipation of growth in the company’s overall operating profit dollars, and the belief that, as free cash flow normalizes, HP will resume its capital return activities.