HP Inc. (NYSE: HPQ) Faces Headwinds Ahead of Earnings: Is a Turnaround on the Horizon?

HP Inc's stock (NYSE: HPQ) is trading at $24.45 per share in today's pre-market session, culminating in a worrying year-to-date decline of approximately 25%. Markets are bracing for the company's Q4 fiscal 2025 earnings announcement, scheduled for release after market close today, which is poised to be a pivotal moment for the tech giant. The webcast, accessible at hp.com/investor/2025Q4Webcast, will be closely monitored for insights into HP's performance and future strategy.

Analysts expect HP Inc (HPQ) to report earnings per share (EPS) of $0.92 for the upcoming quarter, slightly below last year’s EPS of $0.93, suggesting relatively flat profitability compared with the prior year. Revenue is projected at $14.49 billion, reflecting modest growth of approximately 3.1% year-over-year, indicating that while the company continues to expand its sales, growth remains moderate in its mature PC and printer markets.

Recent news events paint a mixed picture. On one hand, HSBC upgraded HP's stock rating on October 14, 2025, from “Hold” to “Buy,” with a price target increase to $30, citing anticipated growth in PC and printer sales driven by the end of Windows 10 support. This positive sentiment briefly buoyed HPQ shares. Additionally, the company's expansion into Saudi Arabia with a new manufacturing facility and AI R&D center initially boosted market confidence.

However, these positive developments are counterbalanced by a series of less encouraging analyst actions. JPMorgan Chase & Co. downgraded HP from “Overweight” to “Neutral” on October 22, 2025, setting a price objective of $30.00.

Barclays lowered its price target from $28.00 to $27.00, maintaining an “Equal Weight” rating. Citigroup also reduced its target price from $29.00 to $27.00, assigning a “Neutral” rating. These revisions suggest a growing sense of caution among analysts regarding HP's near-term prospects.

Institutional activity further reflects this divided sentiment. While Assetmark Inc. acquired a modest number of shares, Ensign Peak Advisors Inc. sold shares of HP Inc., indicating a lack of consensus among major backers.

HP's strategic partnership with Aceso Interactive to integrate patient care platforms with HP | Poly video collaboration devices, along with its broader focus on AI-powered innovations, demonstrates the company's efforts to adapt to evolving market demands. The unveiling of new AI PCs and secure printing solutions at the Amplify Conference in March 2025, and the emphasis on AI at the HP Imagine event in September 2024, highlight HP's commitment to leveraging artificial intelligence across its product lines.

While the prevailing narrative points to underperformance and challenges, it's worth considering a counter-argument. HP has consistently demonstrated its ability to adapt and innovate throughout its history. The current focus on AI, while still in its early stages, could represent a significant long-term growth opportunity.

Moreover, the temporary setbacks in the PC market may be cyclical, and HP's strong brand recognition and established customer base could allow it to weather the storm better than its competitors. The market may be underestimating the potential of HP's strategic investments and its ability to capitalize on emerging trends.

Ultimately, the direction of HPQ hinges on the company's ability to execute its strategic initiatives, navigate market challenges, and deliver strong earnings results. The upcoming Q4 announcement will provide crucial insights into HP's performance and its future trajectory.