Opinions
Jim Cramer - Mad Money
Hewlett-Packard Co
HPQ-N
SELL
Jan 08, 2025
Stock price when the opinion was issued
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Imaging and printing, personal computing, SaaS. Proceeds from SHOP and NVDA were used to buy this one. Reminds him of ORCL. Strong cashflows, mature business, stable market share, returning significant amounts back to shareholders, progress on efficiencies. Attractive PE in mid-teens. Price target of $39.50. Different from HPE stock. Yield is 3.59%.
(Analysts’ price target is $29.30)
HP trades at 11.83x compared to Dell’s 28x. It also pays a 3.18% dividend vs. Dell’s 1.28%. Though the two companies make up half the market’s PC sales, HP says its new line of AI PC’s won’t make a dent in their earnings until the second half of 2024 and particularly 2025. The company’s Q2 total revenue for was $12.8 billion, down slightly from last year's $12.91 billion, but better than the $12.59 billion the street expected.
The AI PC has disappointed--he expected it to mean more and doesn't expect it to. There are better stocks out there, despite a low 9x PE and 3.64% dividend. Shares are -8% the past month. Nothing will move the needle here.