HP stock drops after Credit Suisse downgrade
Shares of HP Inc. were off 0.9% in Friday morning trading after Credit Suisse analyst Shannon Cross downgraded the stock to neutral from outperform, writing that she saw potential challenges for the company in the near term around revenue and margins. Cross is concerned about "weakening consumer sentiment" as well as pressure on average selling prices stemming from reduced demand and improved supply. "We believe lower demand will likely pressure pricing, which has benefited from shortages, inflation and dollar strength," she wrote. "Specifically, within consumer printing, our checks show inkjet printer prices ~50% above pre-pandemic levels which we expect will revert as supply and demand come into balance." Cross also worries about "slower enterprise demand near term for PCs and printing as IT budgets prioritize hybrid cloud, security and software solutions." Shares of HP have fallen 23% so far this year as the S&P 500 has dropped 17%.
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