Pitch: COVID beneficiary with expanded margins due to increased demand/pricing for home printers and notebooks. Margins to normalize to pre-covid levels due to fierce competition. Mgmt’s projections of 1% growth are unrealistic.
Valuation: Assuming currently elevated margins HPQ trades at 8.5x FY23 EBIT. Author’s base case with 4% revenue contraction, pre-COVID margins and 7xEBIT multiple results in $26/share target.
Full HQP write-up (free guest account required):
https://valueinvestorsclub.com/idea/HP/8732523640