Trefis members have created forecasts for two key drivers of HP’s (NYSE:HPQ) stock over the last week: (1) Printer & Cartridges EBITDA Margin and (2) HP Market Share in the printer market. The member forecasts suggest that Printer & Cartridges EBITDA Margin will trend above, while HP Market Share will trend in line with the estimates of the in-house team of analysts at Trefis.
HP competes with Dell (NASDAQ:DELL) and Lexmark (NYSE:LXK) in the printers & ink cartridges market. We currently have a Trefis price estimate of $54 for HP’s stock, about 28% above the current market price of around $41.
We estimate that Printers & Ink Cartridges constitute around 26% of HP’s stock. Hence the stock is quite sensitive to (1) Printer & Cartridges EBITDA Margin and (2) HP Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
1. Printer & Cartridges EBITDA Margin
The average of Trefis member forecasts for Printer & Cartridges EBITDA Margin indicate an increase from around 23% in 2010 to around 24% by 2016, compared to a flat baseline Trefis estimate of close to 22% over the Trefis forecast period. The member estimates imply an upside of 4% to the Trefis price estimate for HP’s stock. In the past, Printer & Cartridges EBITDA Margin has increased from 16.5% in 2005 to around 22% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of HP’s stock to Printer & Cartridges EBITDA Margin.
Our complete analysis for Printer & Cartridges EBITDA Margin is here.
The average of Trefis member forecasts for HP’s Market Share in printers are in line with our forecast. The baseline Trefis estimate projects an increase from 41% in 2010 to around 42% by the end of the Trefis forecast period. In the past, HP Market Share has increased from 33.5% in 2004 to 40% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of HP’s stock to HP Market Share.
