The decline in PC shipments has continued in Q4, indicating more trouble for PC makers like HP Inc (NYSE:HPQ) and Dell Technologies (NYSE:DELL). According to IDC (International Data Corporation) tracker, global PC shipments have declined by 28.1% in the fourth quarter as the demand has slowed from the pandemic boom amidst a worsening economic environment.
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The data highlighted that the pandemic boom is over for PC makers, indicating 2023 could be another challenging year.
Echoing similar sentiments, a Gartner report highlighted that the PC market, especially the enterprise segment, has deteriorated, implying it might not return to growth until 2024.
The continued decline in PC shipments is a sign of worry for the companies operating in this space. However, the latest IDC and Gartner data shouldn’t surprise much, as HP warned about the slump in demand during its Q4 conference call.
During the call, HP said it expects the overall PC market to decline in Fiscal 2023. The company noted that the softness in demand in both consumer and commercial channels would continue in 2023 and weigh on its financials.
Similarly, Dell cautioned investors about the softness in the near term. The company said that slowing economic growth, high inflation, and interest rate hikes would hurt its customers and their IT spending. Dell is also projecting a decline in its revenue in Q4.
Against a challenging backdrop, let’s consider what analysts recommend for these stocks.
Is HPQ a Buy, Sell, or Hold?
Given the headwinds, HPQ stock has a Moderate Sell consensus rating on TipRanks based on five Hold and three Sell recommendations. Moreover, HPQ’s price target of $28.25 implies a downside of about 2%. Notably, HPQ stock has lost about 24% of its value in one year.
Is DELL a Buy or Sell?
Despite challenges, analysts are bullish about DELL stock owing to its attractive valuation. Bernstein analyst Toni Sacconaghi finds DELL’s valuation compelling at current levels. Meanwhile, Deutsche Bank analyst Sidney Ho tells investors that DELL’s risk/reward is favorable. However, both of these analysts lowered their price target on DELL stock.
It has 10 Buy and three Hold recommendations, resulting in a Strong Buy consensus rating. Further, analysts’ average price target of $50.31 implies 23.4% upside potential.
