UBS Analyst David Vogt downgraded HP’s (NYSE) shares to Neutral and Buy, with a target of $40.00 per share.

Yesterday, HPQ shares soared by nearly 15% after the disclosure that Berkshire Hathaway (NYSE: Warren Buffett) had acquired approximately 121 million shares for a total of $4.2 billion.

HP shares rose yesterday to new all-time highs above $40.00. The analyst believes the HP stock price has reached UBS’s price target.

He also cited additional factors as contributing to his downgrade, such as incremental signs of softness for low-end consumer PCs after recent checks over the last month, and the possibility of a slower buyback in next year, following the closing of the Plantronics deal (NYSE:), in late CY22.

The valuation at $42.2B is a reflection of the solid execution. Since late 2021, the P/E multiple has risen around 33%.

We believe that the threat of PC unit growth turning negative in the October quarter is rising due to supply chain headwinds, macro cross currents, and recent inspections. Vogt stated that the solid performance of PCs over the past twelve months (HPQ = 28%, vs. 12%) and NTM PE at 9.5x is comparable to our target, suggests we’re stepping back.

Pre-open Friday saw HPQ stock fall nearly 2%

By Senad Karaahmetovic