Introduction
HP Inc. (NYSE: HPQ) reports its fiscal 2025 fourth-quarter and full-year results, revealing mixed outcomes: revenue growth paired with declining earnings. Analysts remain cautious, with price targets reflecting a wide range of expectations. This report outlines the key financial results, strategic initiatives, and the latest analyst forecasts shaping investor sentiment.
Fiscal 2025 Results: Revenue Up, Earnings Down
HP’s fiscal 2025 net revenue reached $55.3 billion, marking a 3.2% year-over-year increase, while GAAP diluted EPS declined to $2.65 from $2.81, and non-GAAP EPS fell to $3.12 from $3.43 . In the fourth quarter, revenue rose 4.2% to $14.6 billion, but GAAP EPS dropped to $0.84 (from $0.93), and non-GAAP EPS slipped to $0.93 (from $0.96) .
Strategic Cost Savings and AI Investment
HP announced a company-wide initiative targeting approximately $1 billion in gross run-rate cost savings by the end of fiscal 2028. This includes restructuring charges of around $650 million and workforce reductions of 4,000–6,000 employees . The initiative aligns with HP’s push to embed AI across operations to drive productivity and innovation .
Segment Performance: Personal Systems vs. Printing
Personal Systems revenue grew 8% year-over-year to $10.4 billion, supported by unit growth and higher average selling prices. Notably, AI PCs accounted for over 30% of shipments . In contrast, the Printing segment saw a 4% decline in revenue, with hardware unit sales down 12%, though supplies and industrial graphics showed resilience .
Cash Flow and Shareholder Returns
HP generated $3.7 billion in operating cash flow and $2.9 billion in free cash flow for fiscal 2025. The company returned $1.9 billion to shareholders through dividends and share repurchases . In Q4 alone, HP returned $800 million, raised its quarterly dividend to $0.30 per share, and ended the quarter with approximately $3.7 billion in cash and equivalents .
Fiscal 2026 Guidance
HP projects fiscal 2026 non-GAAP EPS in the range of $2.90–$3.20 and GAAP EPS between $2.47–$2.77. The company anticipates free cash flow of $2.8–$3.0 billion, with a memory cost headwind of about $0.30 per share factored into guidance .
Analyst Ratings & Price Targets
Analyst sentiment remains mixed, with a consensus rating of “Hold.” The average 12-month price target ranges from $24.14 to $24.54, implying upside of approximately 25–30% from current levels .
Recent individual analyst actions include:
– BofA Securities downgraded its target from $26 to $20 (Sell) .
– Citigroup maintained a Hold rating, adjusting its target from $25 to $22 .
– Morgan Stanley maintained a Sell rating, lowering its target from $20 to $18 .
– Barclays downgraded its target from $24 to $18 (Sell) .
Other sources show a broader range: a consensus target of $28.69 based on 15 analysts, with a high of $39 and a low of $21 . Morgan Stanley’s target of $21 suggests a potential downside of nearly 13.7% from current levels .
Market Snapshot
As of February 23, 2026, HPQ trades at approximately $18.38, with a P/E ratio of 8.82 and EPS of $2.74 citeturn0finance0. This valuation remains well below its fair P/E ratio of 23.5x, suggesting potential undervaluation .
What’s Next for Investors
HP’s near-term outlook hinges on its ability to execute cost-saving initiatives and manage memory cost pressures. AI PC adoption and margin recovery in Personal Systems will be key to offsetting declines in Printing. Analyst revisions may follow upcoming quarterly results and updates on restructuring progress.
Conclusion
HP Inc.’s fiscal 2025 results reflect modest revenue growth amid earnings pressure. The company’s strategic pivot toward AI and cost efficiency is central to its outlook, though memory cost headwinds and a declining Printing segment pose challenges. Analyst price targets vary widely—from $18 to $39—highlighting uncertainty. Investors will closely monitor execution of the cost savings plan, AI adoption trends, and margin recovery in the coming quarters.
