HP (HPQ) is facing margin pressures and secular declines in the Print segment, but management should be able to execute its cost-mitigation program, take out $1 billion in annualized run-rate savings by 2028, and get more share in premium verticals, RBC Capital Markets said in a note emailed Friday.
Additionally, the company's "focus on hybrid AI at the edge, leveraging PCs, print, and device-management software as a connected platform" will likely back revenue growth inside HP's long-term goal of 2% to 4%, the note said.
The company is well positioned to see benefits from the "confluence of AI PC adoption, the shift toward edge computing and enterprise requirements for data privacy," the note said.
RBC said HP's personal computer unit volumes will likely decrease mid-teens year on year in H2 2026, but the investment firm expect "continued revenue growth in PS through a combination of pricing actions, share gains in premium categories, and deeper penetration of AI-enabled devices."
The investment firm noted HP expects AI PC shipments of 60% to 70% by 2027, up from about 45% in Q3 2026 as companies "increasingly deploy local inference to address cloud token economics, latency constraints, and data governance requirements."
RBC started coverage of HP with a sector perform rating and $33 price target.
Price: $36.15, Change: $+3.42, Percent Change: +10.43%