Citigroup has upgraded the stock to a “Buy” rating
The shares of HP Inc (NYSE: HPQ) are up 1.8% this morning, trading at $ 32.24 after Citigroup upgraded to Buy from Neutral. Citing strong demand for PCs, the analyst added that demand will not “drop to pre-pandemic levels once supply shortages abate”.
Security has seen a solid increase over the past 14 months. In fact, HPQ just hit an all-time high of $ 36 on May 10, beating its previous high over 20 years ago in April 2000. Though it has cooled since then, the stock’s 70-day moving average has helped the most contain this decline. Maintain a lead of around 90% after 12 months.
Analysts remain cautious, which could result in even more bull notes should HPQ maintain some of this upward momentum. Only three analysts in the coverage today called the stock a “strong buy” compared to six who said “hold” or worse. Additionally, the 12 month consensus price target of $ 31.69 is a 1.8% discount off current levels.
A similar sentiment can be observed on the International Securities Exchange (ISE), the Chicago Board Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX). HPQ has a 10-day put / call volume ratio of 1.52, which is more than 92% of the readings from the previous year. This means that long puts have been a lot more popular than usual lately. With that in mind, the Schaeffer Put / Call Open Interest Ratio (SOIR) of the stock of 1.78 is in the top percentile of its annual range, which means that short-term options traders were no longer biased in the past year.
It should also be noted that HP released its earnings report for the second quarter after trading closed on Thursday, May 27th. Looking back at the stock’s post-earnings moves over the past two years, HPQ posted positive sessions the next day on the fifth day, up from eight times, although it suffered a 12.3% decline around that time last year. Regardless of direction, HPQ averaged 5.1% return on the next day, slightly less than the 9.9% surge the option pits are seeing during that time.