HPQ Stock: This Could Be a Big Deal for HP Inc

HPQ StockBig News for HPQ Stock

HP Inc (NYSE:HPQ) will launch an even thinner version of the “EliteBook Folio” in a move that could be a big deal for HPQ stock.

The new version will be called the “Spectre.” It represents Hewlett Packard’s first foray into the premium notebook segment and targets business users. HP is going on the offensive after its split from Hewlett Packard Enterprise Co with a new laptop that has Apple in its viewfinder.

The company will be releasing more details on April 5 and HPQ stock should benefit. This is nothing short of a transformation for Hewlett Packard. The computer manufacturer suddenly finds itself in a position to challenge Apple’s “Macbooks” and possibly even tablets. Certainly, Hewlett Packard is going to emerge as a trendsetter. (Source: “How Will HP Inc. (HP) Stock React Ahead of Plan to Unveil Ultra-Thin Laptop?TheStreet, April 4, 2016.)

“For years, Apple (AAPL) has been seen as the innovator and the driver of innovation,” said Ron Coughlin, president of HP’s personal systems group. But HP could take back that role and the new EliteBook could be the first salvo in that battle. (Source: Ibid.) The new laptop is both stronger and lighter with a design featuring an aluminum body. It aspires to become the thinnest laptop on the market (note the current HP EliteBook Folio features a thickness of 12.5 mm).

HP plans to launch a new series of premium devices running “Windows 10” tomorrow in Versailles at an event organized by the New York Times. But what HP really wants to achieve through the new laptop is increasing sales. (Source: “HP Goes Lean to Draw Premium Buyers,” The Wall Street Journal, April 3, 2016.) HP has started selling products to win over some would-be Apple customers with more attractive devices. These include a big-screen smartphone, the “Elite X3.” It doesn’t just look good—users can pair it with accessories to be used like a PC. (Source: Ibid.)

HP needs something special to boost sales and to revive HP stock. Last year, the company succeeded in increasing global shipments from 18.4% to 19.4%. But overall unit sales and revenue dropped 5.9% and 12.2% respectively. Apart from the revamped product strategy, HP plans to lay off around 3,000 of HP Inc’s 50,000 employees. (Source: “HP To Take On Apple’s Thin-Binge With 11mm, 13-inch MacBook Challenger,” HotHardware, April 4, 2016.)

Moreover, last October, Hewlett Packard split into two separately traded companies: HP Inc sells computers and printers, while Hewlett Packard Enterprise (HPE) sells commercial computer systems, software, and tech services. (Source: TheStreet, op cit.)

The jury is still out on HP’s new strategy. Certainly, HP stock is more appealing now. The company has increased its profit margins. It remains to be seen whether the new design approach manages to improve earnings-per-share (EPS) growth and operating cash flow. (Source: “Analysts Observable Stocks: Hewlett-Packard Company (NYSE:HPQ), SanDisk Corporation (NASDAQ:SNDK),” Street Updates, April 4, 2016.)

HP’s move is bold and it could pay off where HP stock is concerned. The idea of chasing Apple in the premium segment is only obvious at first glance. In fact, none of HP’s competitors are planning anything similar. Dell is not competing in the race to create the thinnest device.