By Angela Palumbo

The challenges HP Inc. faced in 2025 will continue to plague it in the new year, Barclays said.

Analyst Tim Long downgraded shares of HP to Underweight from Equal Weight on Friday, cutting his price target to $18 from $24. That implies a 13% slide from the stock's Thursday closing price of $20.61.

"While we see the stock as inexpensive, we believe secular challenges across both PCs and Printing, combined with a lack of catalyst, will cause the stock to remain pressured in 2026," Long wrote.

HP had no immediate comment.

Shares of HP were up 0.2% on Friday afternoon to $20.66, after spending the morning mostly in the red. The stock is trading at 6.6 times the earnings per share expected over the next 12 months, compared with the five-year average of 8.4 times.

HP stock fell 32% in 2025, its worst calendar-year performance since 2015, according to Dow Jones Market Data. Among other issues, worry that consumer spending would weaken, hurting demand for PC and printers, dragged down the price.

Fourth-quarter printing revenue fell 4% from the prior year, but so-called personal systems revenue rose 8% and beat Wall Street estimates. HP cited strong demand for AI-powered computers and the introduction of the Windows 11 operating system as reasons for better-than-expected sales in the segment, which includes PCs.

Microsoft stopped providing support for the Windows 10 operating system in October. While that has created an incentive for people and businesses to buy laptops, Long thinks the boost is over.

"The WIN11 refresh is largely done in the US with the refresh now 60% captured," Long wrote. "70% is where the refresh opportunity starts to asymptote, and with the cycle almost there, we don't view much upside in the year

Memory costs have also surged in response to the rising demand for chips that support AI.

CEO Enrique Lores said on the company's fourth-quarter earnings call that "for the second half of the year, we expect Personal Systems margins to be impacted. Therefore, we are taking a prudent approach to our guide while implementing aggressive actions to mitigate this."

Long wrote that both gross and operating margins could worsen as a result of competition and limited supplies of memory.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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January 16, 2026 13:04 ET (18:04 GMT)

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