HP Inc has faced renewed selling pressure as the company navigates a challenging transition, softer profit expectations, and leadership changes that have spooked markets. In the past week, HP’s shares have lagged key competitors and slipped further toward their 52-week lows, underperforming peers even on days when the broader market gained. The stock is still down more than 40 percent from its 52-week high of approximately $35.28, and it hit a 52-week low of $20.64 earlier in January, underscoring the depth of recent weakness.
Investor caution has been heightened amid macro headwinds, cost pressures, and persistent concerns about demand for traditional PCs and printing supplies. Even initiatives like a generous dividend and long history of payouts have not been enough to fully stabilize sentiment, despite continued dividend declarations that yield over 6 percent at current price levels.
Disappointing Earnings Guidance Clouds Outlook
HP’s most recent earnings report showed revenue growth and six consecutive quarters of expanding sales, but the forward guidance disappointed markets, particularly in earnings per share expectations for fiscal 2026. The company projected non-GAAP EPS of $2.90 to $3.20 for the full 2026 fiscal year, below the average analyst estimate, and provided Q1 2026 EPS guidance of $0.73 to $0.81, slightly under consensus. This has reinforced concerns that margin pressure from rising component costs, tariffs and elevated memory prices will weigh on profitability throughout the year.
$HPQ reported for fiscal 2025 a net revenue of about $55.3 billion, up roughly 3.2 percent year-over-year, while full-year non-GAAP diluted net EPS declined from the prior year, underscoring a period of muted profit growth. Notably, HP’s fourth quarter net revenue of $14.64 billion beat expectations, and adjusted earnings per share of $0.93 outpaced forecasts but the market’s focus stayed on the softer guidance and expected headwinds.
Leadership Changes and Strategic Redirect
Adding to market unease, longtime CEO Enrique Lores is leaving HP to become CEO of PayPal, effective March 1, 2026, and Bruce Broussard has been named interim CEO. Such a rare executive shift coupled with an earnings guide that fell short of analyst expectations has amplified the sense of uncertainty around HP’s near-term strategic direction.
Despite the change at the top, HP reaffirmed its outlook for fiscal 2026, including its revenue and EPS guidance and a free cash flow target of $2.8 billion to $3 billion, suggesting leadership continuity even amid transitional turbulence.
Cost Pressures and Structural Challenges
HP continues to grapple with a complex operating environment. Beyond external pressures like tariffs and rising memory costs, the company is undertaking cost reduction efforts tied to AI adoption and restructuring plans, which include job cuts estimated between 4,000 and 6,000 employees by fiscal 2028 to capture gross savings of around $1 billion annually (Reddit reporting on restructuring plans) (turn0reddit62). Though part of a longer-term profitability strategy, such structural changes can add short-term cost volatility and weigh on investor sentiment.
Analyst perspectives on HP remain mixed. In the past year, price targets for HP have been trimmed on concerns about slower PC demand and cost headwinds. For example, Morgan Stanley reduced its target to $26 from $29, highlighting tariff-related cost impacts and moderating expectations around EPS growth.
What Investors Should Watch Next
As HP works through a pivotal transitional phase, several key indicators will guide investor sentiment:
Demand trends in PCs and printers: Sustained unit growth and AI-enabled PC uptake can offset weakness in legacy segments.
Profitability metrics: Stabilization or improvement in adjusted EPS and operating margins will be crucial to restoring confidence.
Leadership clarity: The appointment of a new permanent CEO and strategic priorities around innovation and cost structure will influence perceptions of execution risk.
Dividend sustainability: With a continuing high dividend yield, investors will monitor whether the payout remains attractive relative to growth prospects.
While HP’s stock remains below pivotal levels and market sentiment is cautious, the company’s efforts to balance cost management, leadership transition and strategic reinvestment will determine whether this period of underperformance signals a temporary pullback or a deeper valuation reset.