HP Inc. stock is now a Buy said a BofA Securities analyst who sees an improving PC market and a possible bottom in the company’s free cash flow.
One reason for the double upgrade was Mohan’s belief that the personal computer market should recover, driving growth at the maker of personal computers and printers. On a call with investors after third-quarter earnings in August, HP Chief Executive Enrique Lores said that company’s PC business “grew from Q3 to Q2. We expect it to grow also from Q4 to Q3. So, the recovery of the business is happening.”
Mohan believes that HP’s free cash flow will bottom in fiscal 2023, another reason why he says to buy the stock. Analysts surveyed by FactSet expect the company to report fiscal 2023 free cash flow of $3.1 billion, a decline from the prior year’s $3.9 billion. Analysts anticipate 2024 free cash flow of $3.3 billion.