Shares of global technology company HP Inc. (HPQ) lost more than 8% on Friday following the company’s disappointing quarterly earnings report.
For the first quarter, HP missed analysts’ expectations for their earnings per share by -$0.01. The company earned $0.74 per share versus a consensus estimate of $0.75.
HP exceeded revenue expectations slightly as the company reported $13.5 billion in sales for the quarter compared to estimates of $13.4 billion. That number reflects year-over-year growth of 2.4%, up from 1.7% last quarter.
Each of these earnings per share missed was compounded by the company's guidance for next quarter. For the second quarter, Hewlett-Packard estimates that its earnings per share will come within the range of $.75 to $0.85. Wall Street analysts have their targets set at $0.86 per share.
Company did reaffirm its fiscal year 2025 EPS outlook of $3.45-$3.75 per share.
As companies struggled to prepare for new tariffs against China, HP announced that the company expects 90% of its products sold in North America will be built outside of China by the end of 2025.
Today's selloff shifts HP shares into a technical bear market.
HP stock is now trading below its 20-month moving average at $31.07. The stock is also teetering on critical price support at the round number $30.
Overhead, HP’s 50- and 200-day moving averages have shifted into bearish patterns as well. That negative momentum will be seen as price pressure on the stock as it moves below $30.
Over the short-term, investors may expect to see shares post a “dead cat bounce” as they trade at $30 given that the stock is exhibiting short-term oversold indications.
Following a short consolidation or bounce at $30, investors should expect the negative momentum to result in lower prices.
While Wall Street analysts’ consensus recommendation is a “hold”, the Street’s current price target sits at $36 indicating that some lowering of targets should be expected.
Considering the bear market trend and lowered guidance, HP shares maintain a bearish outlook with a price target of $25.
