Shareholders might have noticed that HP Inc. (NYSE:HPQ) filed its annual result this time last week. The early response was not positive, with shares down 5.5% to US$34.66 in the past week. The result was positive overall - although revenues of US$54b were in line with what the analysts predicted, HP surprised by delivering a statutory profit of US$2.81 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for HP from 13 analysts is for revenues of US$55.0b in 2025. If met, it would imply an okay 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 14% to US$3.27. Before this earnings report, the analysts had been forecasting revenues of US$55.3b and earnings per share (EPS) of US$3.15 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$36.26, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on HP, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$30.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that HP is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.6% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually for the foreseeable future. Although HP's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards HP following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$36.26, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple HP analysts - going out to 2027, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for HP (1 can't be ignored!) that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
