We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HP Inc (HPQ) Shares Jump on Positive Fiscal 2018 Outlook
Read MoreHide Full Article
The world’s largest PC manufacturer, HP Inc. (HPQ - Free Report) , provided fiscal 2018 outlook in its recent Securities Analyst Meeting. The company also provided an update on its turnaround plan and future strategy.
Following the announcement, the company’s shares surged nearly 2.5% in after-hours trading.
HP’s 2018 Projections
For fiscal 2018, HP projects non-GAAP earnings from continuing operations in the range of $1.74-$1.84 per share (mid-point: $1.79 per share). The Zacks Consensus Estimate is pegged at $1.75 per share. GAAP earnings per share from continuing operations are expected to be in the range of $1.69-$1.79 per share.
Free cash flow is projected to be approximately $3 billion for full year 2018. The company anticipates returning up to 50-70% of free cash flow to shareholders via dividends and share repurchase in fiscal 2018. Moreover, the company expects to increase quarterly dividends by 5%.
Factors in Favor of HP
Notably, the stock has had a remarkable run so far this year. In the year-to-date period, HP has surged 37.5%, outperforming 34.4% growth recorded by its industry.
According to Dion Weisler, President and CEO, HP, “We are well positioned to lead in the core, accelerate growth opportunities, like A3 and Graphics in Printing and commercial transformation in Personal Systems, and capture the future with 3D Printing in plastics and now metals.”
The much awaited pending acquisition of Samsung Electronics’ printer business, for $1.1 billion, recently crossed another milestone after China's Ministry of Commerce gave approval for the transaction, per media sources. This is another factor that provided a boost to the share price movement.
The acquisition is a strategic move by HP, as it will expand the company’s printing business as Samsung's printer business has more than 6,500 printing patents. Additionally, the deal will bring in additional 1,300 researchers and engineers, which will support development and manufacturing of HP printers, going forward.
The spin-off from its parent, Hewlett-Packard Company, along with restructuring initiatives, such as focus on product innovations, pricing, marketing and sales activities, divestment of non-core assets and cutting jobs to lower costs, are apparently paying off at last. Although, worldwide PC shipments declined in the third quarter, but, HP retained its leading position during the quarter, per Gartner. Further, this was the sixth consecutive quarter of year-over-year shipment growth for the company, following five back-to-back quarters of underperformance.
Gartner also stated that among the top five vendors, only HP recorded growth in PC shipment, while Dell, Apple (AAPL - Free Report) , Lenovo and Asus witnessed declines during the third quarter. With a market share of 30.5%, HP witnessed year-over-year growth of 4.4% in PC shipment.
The company is also trying to enhance 3D printing business capabilities. It should be noted that even though HP has been operating in this space for almost five years now, the company is way behind 3D Systems Corporation (DDD - Free Report) and Stratasys Ltd. (SSYS - Free Report) .
Consequently, in order to fortify its presence in this space, last year, HP unveiled its Jet Fusion 3D Printing Solution with two models to choose from — 4200 and 3200. Unlike 3D Systems and Stratasys, which targets all kinds of consumers, HP emphasizes only on industrial markets due to its ability to afford a premium range of 3D printing solutions.
To satisfy customers in this space, HP has collaborated with various companies like Siemens, BMW, Nike Inc. and Autodesk Inc., with an aim to develop more advanced 3D printing technologies for a wide array of industrial use.
HP’s efforts to revive printing business have been commendable. Looking HP’s strategies yielding satisfactory results, we feel the company can turnaround the printing business, and claim a bigger share in the inkjet as well as 3D printer market.
Bottom Line
These favorable forecasts along with HP’s effort to boost earnings going ahead, raises investors’ confidence.
However, macroeconomic challenges and tepid IT spending remain near-term concerns. Competition from the likes of International Business Machines and Apple add to its woes.
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Image: Bigstock
HP Inc (HPQ) Shares Jump on Positive Fiscal 2018 Outlook
The world’s largest PC manufacturer, HP Inc. (HPQ - Free Report) , provided fiscal 2018 outlook in its recent Securities Analyst Meeting. The company also provided an update on its turnaround plan and future strategy.
Following the announcement, the company’s shares surged nearly 2.5% in after-hours trading.
HP’s 2018 Projections
For fiscal 2018, HP projects non-GAAP earnings from continuing operations in the range of $1.74-$1.84 per share (mid-point: $1.79 per share). The Zacks Consensus Estimate is pegged at $1.75 per share. GAAP earnings per share from continuing operations are expected to be in the range of $1.69-$1.79 per share.
Free cash flow is projected to be approximately $3 billion for full year 2018. The company anticipates returning up to 50-70% of free cash flow to shareholders via dividends and share repurchase in fiscal 2018. Moreover, the company expects to increase quarterly dividends by 5%.
Factors in Favor of HP
Notably, the stock has had a remarkable run so far this year. In the year-to-date period, HP has surged 37.5%, outperforming 34.4% growth recorded by its industry.
According to Dion Weisler, President and CEO, HP, “We are well positioned to lead in the core, accelerate growth opportunities, like A3 and Graphics in Printing and commercial transformation in Personal Systems, and capture the future with 3D Printing in plastics and now metals.”
The much awaited pending acquisition of Samsung Electronics’ printer business, for $1.1 billion, recently crossed another milestone after China's Ministry of Commerce gave approval for the transaction, per media sources. This is another factor that provided a boost to the share price movement.
The acquisition is a strategic move by HP, as it will expand the company’s printing business as Samsung's printer business has more than 6,500 printing patents. Additionally, the deal will bring in additional 1,300 researchers and engineers, which will support development and manufacturing of HP printers, going forward.
The spin-off from its parent, Hewlett-Packard Company, along with restructuring initiatives, such as focus on product innovations, pricing, marketing and sales activities, divestment of non-core assets and cutting jobs to lower costs, are apparently paying off at last. Although, worldwide PC shipments declined in the third quarter, but, HP retained its leading position during the quarter, per Gartner. Further, this was the sixth consecutive quarter of year-over-year shipment growth for the company, following five back-to-back quarters of underperformance.
Gartner also stated that among the top five vendors, only HP recorded growth in PC shipment, while Dell, Apple (AAPL - Free Report) , Lenovo and Asus witnessed declines during the third quarter. With a market share of 30.5%, HP witnessed year-over-year growth of 4.4% in PC shipment.
The company is also trying to enhance 3D printing business capabilities. It should be noted that even though HP has been operating in this space for almost five years now, the company is way behind 3D Systems Corporation (DDD - Free Report) and Stratasys Ltd. (SSYS - Free Report) .
Consequently, in order to fortify its presence in this space, last year, HP unveiled its Jet Fusion 3D Printing Solution with two models to choose from — 4200 and 3200. Unlike 3D Systems and Stratasys, which targets all kinds of consumers, HP emphasizes only on industrial markets due to its ability to afford a premium range of 3D printing solutions.
To satisfy customers in this space, HP has collaborated with various companies like Siemens, BMW, Nike Inc. and Autodesk Inc., with an aim to develop more advanced 3D printing technologies for a wide array of industrial use.
HP’s efforts to revive printing business have been commendable. Looking HP’s strategies yielding satisfactory results, we feel the company can turnaround the printing business, and claim a bigger share in the inkjet as well as 3D printer market.
Bottom Line
These favorable forecasts along with HP’s effort to boost earnings going ahead, raises investors’ confidence.
However, macroeconomic challenges and tepid IT spending remain near-term concerns. Competition from the likes of International Business Machines and Apple add to its woes.
HP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>