HP Inc. (HPQ - Free Report) recently launched several digital printers and printing solutions to accelerate its transition from analog to digital printing. The portfolio of HP Indigo digital labels and packaging has been created especially to be demonstrated in the drupa 2020, which is scheduled to be held from Jun 16-26.
The B2 commercial printing solution — HP Indigo 100K Digital Press — is expected to fortify the company’s foothold in on-demand digital printing.
Moreover, the HP Indigo V12 Digital Press, built on next-generation HP Indigo LEPX architecture, is a narrow-web label press that increases printing speed.
The drupa suite of products also includes the narrow-web HP Indigo 6K and HP Indigo 8K digital presses for label makers; the HP Indigo 25K to reduce total cost of ownership for label as well as packaging converters; and the HP Indigo 35K and 90K for the carton folding market.
Besides, the new HP PrintOSX and the HP Production Pro for Indigo Labels and Packaging Print Server build on the HP Indigo Raster Image Processor, which enables converters to generate more jobs per day. Notably, the HP PrintOSX integrates cloud platform applications with AI-driven service and support infrastructure, enabling higher returns from their investments in the printers.
Portfolio Expansion to Boost Printing Business
HP’s new suite of products and solutions has been designed to allow customers to build the digital Print Factory of the Future in order to automate production and minimize operator touchpoints.
According to Technavio, the global digital packaging and labeling market is poised to grow $11.23 billion between 2019 and 2023, at a CAGR of more than 13%.
Per management at HP, the growth of the digital labels and packaging market is fueled by the increasing need for on-demand production, SKU diversification, customization and printing with reduced waste, which are driving converters to adopt various solutions.
Notably, HP Indigo is witnessing strong adoption among label and packaging converters, as it delivers a wider range of jobs faster, with minimal labor and waste production. This makes us optimistic about the prospects of the company’s latest products.
HP has recently been witnessing declining sales in the Printing business. In the first quarter of fiscal 2020, HP’s Printing revenues (32% of net revenues) fell 6.6% year over year to $4.72 billion.
The new printing solutions are expected to boost this particular segment of the company.
Product Launches Amid HP-Xerox Clash
Interestingly, the series of product launches came at a time when the HP-Xerox (XRX - Free Report) tug of war is at its peak, with HP rejecting yet another takeover bid from Xerox a few days ago, citing the latter’s operational inexperience in handling PCs, 3D printing and digital manufacturing businesses.
Nonetheless, both firms have decided to conduct a CEO meeting this week to determine whether a business combination would be possible. If the merger materializes, it could possibly benefit HP’s Printing business by helping it penetrate the corporate copier market, which is dominated by Xerox.
Zacks Rank & Other Stocks to Consider
HP currently carries a Zacks Rank #1 (Strong Buy).
A couple of similar-ranked stocks in the broader technology sector are Cirrus Logic, Inc. (CRUS - Free Report) and Mellanox Technologies, Ltd. . You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Cirrus and Mellanox is currently pegged at 15.27% and 18.25%, respectively.
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