JP Morgan Chase's Analysts Downgrade HPQ

Analysts at JP Morgan Chase have downgraded the company's stocks due to the downfall of PC market

Since the time Hewlett Packard has split into two distinct entities namely the Hewlett Packard Co and Hewlett Packard Enterprise Co., so both the companies started to trade officially from November 2nd, 2015 onwards. So now various analytical and investment firms have started to cover the stocks where they have also published their notes to the clients and investors which encompasses the long term impacts of the stocks. It is believed that most analysts and financial firms have a bullish take on both of these stocks JP Morgan Chase & Co. has a different opinion.

The analysts at JP Morgan Chase have a bearish take on the Hewlett Packard Co.’s stocks. The financial institution gave their reason regarding the bearish position of the company. JPM says that it is because of the ‘structurally weak end-markets amidst a challenging macro environment.’ It is known that the market of personal computers (PC) is declining significantly and this could be one of the main reasons, according to the analysts, that the company is unable to perform at its fullest.

Analysts believe that there will be tougher times ahead due to this trend therefore the PC giants in the market are waiting for the time when this industry will take a considerable turn around to show that the road to recovery has started. Investors and shareholders of the companies that belong to the PC industry are very much concerned about the future. They think there is no chance that the industry will see a considerable turn around in the coming times and label it as an ‘outlandish thought’. JP Morgan agrees to the thoughts of investors.

The financial services have decided to downgrade the stock rating of HP Inc. The rating is now Neutral which was changed from Overweight. Furthermore, JP Morgan also cut down its target price to $14 which previously was $31.

A 4 percent year on year decline in notebooks and 1 percent year on year decline for desktop PCs next year are expected. These estimates were provided by the analysts working for JP Morgan. One analyst, Rod Hall, stated, “While the HDD companies as well as Intel both talked about seeing signs of stabilization in the PC market, we remain somewhat unconvinced given continuing evidence of macro instability.”

HP is also waiting for the opportunity to turn around the tables. It is not because the company is performing poor but the rising trend of laptops and smartphones have resulted in a major downfall.