HP Inc. (HPQ) Shares Drop 11%

HP Inc. (HPQ) shares plummeted 11% following the release of its quarterly earnings report:

→ Earnings per share (EPS): Actual = $0.93, Expected = $0.93
→ Revenue: Actual = $14.05 billion, Expected = $13.09 billion

While HP Inc.'s reported revenue and EPS aligned closely with analysts’ expectations, the market was disappointed by its forward guidance. According to FactSet, the company forecast EPS for the next quarter at $0.73, falling short of the $0.85 expected by analysts.

As a result, HPQ shares dropped below $35 for the first time since October 1. Is now the time to buy shares in this leading provider of PCs and high-tech products?

Analysts remain cautious, according to TipRanks:
→ Only 3 out of 15 analysts recommend buying HPQ shares.
→ The average 12-month price target for HPQ stands at $36, though post-earnings revisions may lower these estimates.
Technical Analysis of HPQ Shares:

→ The stock is trading within an upward channel (indicated in blue), and the long lower shadow on yesterday’s candle suggests strong demand near the channel’s lower boundary.

→ The $39 level has acted as resistance for the second time this year (highlighted by arrows) and is likely to remain significant.

→ The ATR indicator signals a notable spike in volatility.

Given the sharp price movement, it is reasonable to anticipate another period of price consolidation on the HPQ chart, similar to the pattern observed during the summer (highlighted by the orange triangle).

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