Morgan Stanley Downgrades HP Stock Despite Earnings Beat
Despite HP Inc.'s (HPQ) strong performance in 2026, with shares up nearly 38%, Morgan Stanley has issued a bearish outlook. The firm maintained an Underweight rating on the stock and raised its price target to $19 from $17 — implying more than a third drop from HP's closing price of $30.52 as of August 28, 2026. Morgan Stanley analyst Erik Woodring highlighted that while HP reported revenue growth in Q3 fiscal year 2026 and beat earnings expectations, the increase came primarily from higher pricing rather than increased unit sales — particularly in its PC segment. The firm expects continued double-digit declines in PC shipments as rising prices deter buyers. HP's strategy of promoting AI PCs is also under scrutiny; Morgan Stanley argues these devices are not driving new demand but merely replacing traditional models, failing to boost overall volume. This view contrasts with HP’s optimism about margin recovery through 2027.
Topics: analyst outlook HP Inc. Morgan Stanley price target stock rating