HSBC downgrades HP Inc. to Hold on cost pressures

HSBC yesterday downgraded HP Inc. (HPQ) to Hold from Buy with a price target of $38, down from $39, following the fiscal Q4 report. HP expects cost pressure to continue in the first half of 2005 and this, in addition to seasonality, was one of the key drivers of weak Q1 guidance, the analyst tells investors in a research note. As such, HSBC is taking a “cautious stance given the near-term hit on profitability due to higher input costs.”