Why HP (HPQ) Shares Are Trading Lower Today

What Happened?

Shares of personal computing and printing company HP (NYSE:HPQ) fell 5.5% in the morning session after the company announced the immediate resignation of its CEO, Enrique Lores, which was followed by downgrades from several investment banks. Lores stepped down from his role as President, CEO, and board member to become the new chief executive at PayPal. In response to the leadership change, both Barclays and Goldman Sachs downgraded HP's stock. Barclays lowered its rating to "Underweight," while Goldman Sachs moved its rating to "Sell." Analysts cited ongoing challenges in the personal computer and printing markets, along with concerns over pressure on profit margins and demand. The company appointed board member Bruce Broussard as the interim CEO. Despite the abrupt change in leadership, HP stated that it maintained its earnings outlook for the upcoming quarters.

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What Is The Market Telling Us

HP’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 14 days ago when the stock dropped 1.7% on the news that Morgan Stanley turned more cautious on the U.S. IT hardware sector and lowered its price target on the company's stock. The investment bank cut its view on the North American IT Hardware industry to “cautious” from “in-line,” warning of a potential 'perfect storm.' The analysts pointed to slowing demand from businesses, rising costs for components, and high stock valuations as reasons for the more defensive stance. Specifically for HP, Morgan Stanley analyst Erik Woodring kept an "Underweight" rating on the stock but cut the price target by 10% from $20.00 to $18.00. The negative sentiment impacted the broader sector, with shares of Dell Technologies and Hewlett Packard Enterprise also falling.

HP is down 14.9% since the beginning of the year, and at $18.83 per share, it is trading 45.8% below its 52-week high of $34.72 from February 2025. Investors who bought $1,000 worth of HP’s shares 5 years ago would now be looking at an investment worth $746.14.

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