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HPQ – Market expectations are for Uniform ROA to fade, but management is confident about pricing discipline, margins, and shareholder returns

February 16, 2021

  • HP Inc. (HPQ:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 19.6x Uniform P/E. At these levels, markets have somewhat bearish expectations for the firm, but management is confident about pricing discipline, margin expansion, and shareholder returns
  • Specifically, management is confident operating margin declines in print were partially offset by supplies volume and pricing discipline. In addition, they are confident Q1 2021 margins will range from 3.5%-5.5% levels, partially driven by pricing discipline, and that they returned a total of $4.1 billion to shareholders in 2020