{"slug": "dont-be-surprised-if-hp-stock-takes-off-on-august-26", "title": "Don’t Be Surprised If HP Stock Takes Off on August 26", "summary": "HP Inc. (NYSE: HPQ) is positioned for a potential stock surge on August 26, when it reports fiscal Q3 2026 earnings after market close, supported by a forward P/E near 10, a 3.93% dividend yield, and AI PC shipments growing to 44% of its mix. Management raised its FY2026 non-GAAP EPS guidance to $2.90-$3.10 and free cash flow guidance to $2.8-$3.0 billion, while Q2 revenue rose 9.0% year over year. The company's AI PC penetration is expected to reach 60%-70% next fiscal year, and it outperforms Hewlett Packard Enterprise (NYSE: HPE) on yield and valuation.", "body_md": "## Cheap Multiple, Real Dividend, and a Confirmed Catalyst Next Week\n\n**HP** **( NYSE:HPQ | HPQ Price Prediction)** screens as a compelling setup for retirement-oriented portfolios heading into next Wednesday’s earnings report, and the setup is not subtle. The company confirmed its fiscal Q3 2026 release for Aug. 26 after the market close. Cheap multiple, rising dividend, accelerating AI PC mix. All three lean the same way.\n\n## Valuation That Ignores the Guidance Raise\n\nHPQ trades at a forward P/E near 10, a price-to-sales ratio of 0.49, and an EV/EBITDA near 8. Management’s raised FY2026 non-GAAP EPS range of $2.90 to $3.10 against a $30 share price still leaves runway, even after a 35.62% year-to-date advance.\n\n## Income That Compounds a Retirement Sleeve\n\nHPQ pays a $0.30 quarterly dividend, an annualized $1.20, yielding 3.93%. Management committed to returning roughly [100% of free cash flow to shareholders](https://247wallst.com/investing/2011/06/29/when-great-share-buybacks-are-clouded-by-awful-buybacks-dividends-rule-xom-ibm-pg-emc-cop-hpq-dtv-trv-ko-mcd-msft-csco-wmt-low-hd-pfe-gs/) so long as gross leverage stays under two times, backed by FY2026 free cash flow guidance of $2.8 to $3.0 billion. That is a durable, well-covered payout profile.\n\n## AI PC Catalyst Is Already Landing\n\nAI PC penetration climbed from more than 35% to 44% of HP’s shipment mix in Q2, with management guiding to 60% to 70% next fiscal year. Roughly 30% of the Windows installed base is still on Windows 10, a live refresh tailwind. Q2 revenue rose 9.0% year over year with Personal Systems operating profit up 30%, the eighth consecutive quarter of top-line growth.\n\n## Better Buy Than Hewlett Packard Enterprise\n\nThe obvious alternative for HP-branded exposure is **Hewlett Packard Enterprise** **( NYSE:HPE)**. HPQ wins the head-to-head on the metrics retirement investors care about: HPQ’s 3.93% yield and forward P/E near 10 deliver more current income and a wider valuation discount than HPE, which trades at a richer multiple after absorbing the Juniper acquisition. HPQ also converts cash faster: $800 million of free cash flow in Q2 alone versus a -$100 million print a year earlier.\n\n## Risk Case, Dismissed\n\nPrinting weakness and rising memory costs are the bear case. Consumer Printing fell 10% year over year, yet total Printing revenue held flat and Personal Systems (roughly 71% of the mix) grew 13%. Management raised guidance *after* flagging commodity headwinds. That is the tell. Keep an eye on HPQ into the August 26 report.\n\n*Contact [email protected] for any questions or corrections.*", "url": "https://wpnews.pro/news/dont-be-surprised-if-hp-stock-takes-off-on-august-26", "canonical_source": "https://247wallst.com/investing/2026/08/21/dont-be-surprised-if-hp-stock-takes-off-on-august-26/", "published_at": "2026-08-21 14:00:42+00:00", "updated_at": "2026-08-21 14:13:10.568937+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-products"], "entities": ["HP Inc.", "Hewlett Packard Enterprise", "Juniper"], "alternates": {"html": "https://wpnews.pro/news/dont-be-surprised-if-hp-stock-takes-off-on-august-26", "markdown": "https://wpnews.pro/news/dont-be-surprised-if-hp-stock-takes-off-on-august-26.md", "text": "https://wpnews.pro/news/dont-be-surprised-if-hp-stock-takes-off-on-august-26.txt", "jsonld": "https://wpnews.pro/news/dont-be-surprised-if-hp-stock-takes-off-on-august-26.jsonld"}}