Shares of HP Inc (NYSE:HPQ) fell by more than 6% in Friday’s premarket as the company’s warning that the semiconductor chip shortage would limit its ability to supply personal computing devices and printers at least until the end of the year overshadowed its robust quarterly earnings.
Notwithstanding shortage of raw materials that go into devices, the maker of desktops, laptops, printers and other IT peripherals retains a bullish outlook about the overall demand.
But the company’s caution only added to what many have been fearing and that is that sales of its PCs might have peaked. The contention is that increasing vaccinations will bring more people back into their offices, diluting the need for personal computers as they no longer work from home.
According to TheStreet, analysts at Citigroup (NYSE:C) pointed to HP not getting “… the full sales upside to flow through the EPS,” which “will likely raise a new question for investors: “Is this the peak?”
Still, Citigroup has a buy rating on the stock and a year’s target of $40, TheStreet said. This is approximately 25% higher from its last close of $32.10.
HP reported second quarter non-GAAP diluted net EPS of $0.93 on revenue of $15.9 billion which rose 27.3% from a year-ago period.
For the third quarter, HP estimates non-GAAP diluted net EPS to be in the range of $0.81 to $0.85.
For fiscal 2021, non-GAAP diluted net EPS is seen between $3.40 and $3.50.
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