HP Inc. (HPQ) Stock: Wall Street’s Forecast Ahead of Wednesday’s Q2 Earnings Report

Key Takeaways

• HPQ shares soared 15% last week following Lenovo’s impressive quarterly results, with approximately 40% of sales tied to AI-enabled products
• JPMorgan increased its price target while maintaining a Neutral stance, partially reversing its October 2026 downgrade
• The options market is pricing in a 9.8% move when HP releases fiscal Q2 earnings on May 27
• Wall Street forecasts approximately $14 billion in revenue (7.2% year-over-year growth) and $0.71 EPS, unchanged from last year
• Consensus rating stands at Moderate Sell — 4 Hold ratings, 4 Sell ratings — with a mean price target of $18.75

HP Inc. shares rocketed 15% higher last Friday. The catalyst wasn’t HP’s own performance — it was Lenovo’s quarterly blowout.

HP Inc., HPQ

The world’s top PC manufacturer, Lenovo, delivered its strongest revenue expansion in half a decade. Approximately 40% of total revenue originated from artificial intelligence-focused offerings. That single metric triggered HPQ’s rally.

Both HP and Lenovo target identical enterprise customers, distribute through overlapping channels, and benefit from synchronized refresh cycles. When Lenovo delivers exceptional results like these, markets extrapolate that HP is experiencing comparable tailwinds.

Investors paid a premium to bet on that correlation.

JPMorgan’s analyst Samik Chatterjee had already lifted his HPQ price target days before Lenovo’s report even dropped. His Neutral rating remained unchanged. Last October, Chatterjee downgraded the stock, cautioning that the Windows 10 upgrade wave was approaching exhaustion and HP would face challenging year-over-year comparisons throughout 2026.

His revised target represents a subtle retreat from that bearish stance — not a complete reversal, merely a recalibration.

Analyst sentiment remains divided. Morgan Stanley similarly increased its target price. Bank of America maintained its pessimistic outlook, suggesting HP might lower full-year guidance during Wednesday’s earnings call.

Critical Metrics for the May 27 Report

HP will unveil fiscal Q2 performance after market close on May 27. Analysts project revenue near $14 billion, representing 7.2% year-over-year expansion. Earnings per share are forecast at $0.71, matching the prior-year quarter.

HP has exceeded earnings expectations in just four of the last eight reporting periods.

The critical figure isn’t whether HP beats or misses consensus — it’s the proportion of AI-enabled PCs in the product mix. During the previous quarter, approximately 33% of HP’s PC shipments featured dedicated neural processing units. If that percentage increased this quarter, especially in commercial segments, the narrative shifts dramatically.

If the ratio stagnated, Friday’s rally amounts to a false signal.

Options traders are positioning for a significant reaction. Implied volatility suggests a 9.8% post-earnings move. For a stock like HPQ, that’s substantial.

The Valuation Argument Skeptics Overlook

HPQ currently trades at a single-digit forward P/E multiple while offering a dividend yield approaching 5%. The S&P 500 yields approximately 1.05% by comparison.

When a stock yields nearly four times the broader index, markets have essentially priced out growth expectations. Over the trailing twelve months, the S&P 500 has climbed roughly 27%. HPQ has declined about 24% during the same period. Even accounting for Friday’s 15% surge, HPQ remains down approximately 5% year-to-date.

This valuation configuration means a multiple expansion doesn’t require explosive results. It simply needs evidence that undermines the bearish thesis.

Bulls require five elements from Wednesday’s announcement: sequential improvement in AI PC penetration, sustained commercial demand, margin protection despite memory component inflation, stabilization of U.S. market share following recent erosion, and unchanged full-year guidance.

Failing to deliver on two of these metrics will likely reverse the recent rally. Achieving four would suggest JPMorgan’s price target is overly conservative.

Wall Street’s aggregate view on HPQ is Moderate Sell, with a consensus price target of $18.75 — representing 25.7% potential upside from present trading levels.

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