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HP Provides Fiscal 2022 Guidance & Raises Dividend; Shares Rise 5%

·2 min read

Shares of HP Inc. (HPQ) jumped 5.2% in Wednesday’s extended trading session after the American multinational information technology company announced its Fiscal 2022 financial outlook and an increase in annual dividend at its 2021 Securities Analyst Meeting.

Furthermore, the company reiterated its Fiscal 2021 guidance provided in the Q3 earnings call and outlined its strategy and opportunities for long-term growth.

The CEO of HP, Enrique Lores, said, “We are strengthening our core business, building a more growth-oriented portfolio, and creating a more digital company to meet changing customer needs and capitalize on secular trends across our categories.”

For Fiscal 2022, the company expects GAAP diluted net EPS to be in the range of $3.86 to $4.06 and estimated non-GAAP diluted net EPS to be in the range of $4.07 to $4.27. Additionally, based on the current environment, the company estimates free cash flow of at least $4.5 billion. (See HP stock charts on TipRanks)

Markedly, for the year 2022, the company anticipates returning at least 100% of free cash flow through dividends and share repurchases.

Notably, the company’s Board has increased the annual cash dividend to $1 per share, up 29% from the prior payout. The company’s annual dividend now reflects a dividend yield of 3.5%. (See Top Smart Score Stocks on TipRanks >>)

Recently, Evercore ISI analyst Amit Daryanani maintained a Buy rating on the stock and a price target of $35 (15.8% upside potential).

Last month, J.P. Morgan analyst Samik Chatterjee downgraded HP to Hold from Buy and decreased the price target to $30 (0.58% downside potential) from $35.

In a note to investors, Chatterjee said that the upside in HP shares seems limited as concerns around the PC cycle are unlikely to dissolve in the near term.

Overall, the stock has a Hold consensus rating based on 5 Holds and 1 Buy. The average HP price target of $31.67 implies 4% upside potential from current levels. Shares have increased 48.8% over the past year.

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