North America Hardware & Storage: 2Q PC Prelim Results: First Unit Decline in Nine Consecutive Qs on Memory and Component Inflation

研报英文原文证据摘录

North America Hardware & Storage: 2Q PC Prelim Results: First Unit Decline in Nine Consecutive Qs on Memory and Component Inflation

North America Hardware & Storage

08 July 2026 Citi Research

infrastructure. This has resulted in aggressive pricing environment, market

share losses in its storage business, and margin erosion.

PC & Data Center Demand Downticks: Hardware demand could recover

slower than expected, and any delays to the PC refresh cycle could have

negative implications for the business.

Dell's AI backlog may not materialize in revenues in CY2026 and could be

pushed out further.

Complicated Ownership Structure: Dell has a fairly complicated ownership

and governance structure.

HP Inc

(HPQ.N; US$22.96; 2; 07 Jul 26; 16:00)

Valuation

Our target price of $25 is based on 8x PE on CY27 estimates, at the stock's 5Y

median. While we believe continued cost-takeout efforts and commodity

cost mitigations should provide offsets to PC headwinds, the larger pressures

of a protracted PC environment, slow AI penetration, and continued print

competition should continue to temper valuations nearer-term. Furthermore,

given softened PC growth expectations, we note that higher PC revenue

growth rates have historically been correlated with higher FCF generation and

higher shareholder returns – and should accordingly moderate any

expectations for near-term multiple expansion.

Risks

Risks to achieving our target price include:

1) hardware demand dynamics, which could impact PC and Print demand

ahead, where better than expected demand could result in higher revenues

than anticipated, and worse than expected demand could result in revenues

falling below expectations;

2) supply chain shocks, which could limit ability to meet demand, where