Why HP Stock Slid by Almost 2% Today
As one of the most storied and high-profile names in tech hardware, HP (NYSE: HPQ) has had many ups and downs as a stock in its history. Unfortunately for the company's shareholders, Tuesday represented one of the down days. On the back of an analyst's price target cut, HP's share price withered by almost 2%. That was marginally worse than the slightly more than 1% slide experienced by the S&P 500 index.
In the morning, Bernstein tech sector prognosticator Toni Sacconaghi Jr. made a fairly dramatic chop to said HP price target. He reduced it by 25%, to $30 per share from his previous estimation of $40. This doesn't mean he's an HP bear, though, as he maintained his market perform recommendation -- neutral, in other words -- on the stock.
The source of Sacconaghi's concern is the company's ever-important printer supplies business, which has historically enjoyed very high margins. The analyst said in his latest research note that the segment's revenue has declined at a compound annual growth rate (CAGR) of 3% across the last 10 years. More worryingly, this metric fell by 9% in the third quarter alone.
Source Fool.com
