HP INC is https://investor.hp.com/overview/default.aspx a leading global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions and services. HP INC sell to individual consumers, small- and medium-sized businesses ("SMBs") and large enterprises.
HP have three reportable Segments: Personal Systems, Printing and Corporate Investments.
Personal Systems offers commercial and consumer desktops and notebooks, workstations, thin clients, commercial mobility devices, retail point-of-sale ("POS") systems, displays, hybrid systems (includes video conferencing cameras and solutions, headsets, voice, and related software capabilities including all products and solutions acquired from Poly), software, support and services.
Printing provides consumer and commercial printer hardware, supplies, services and solutions. Printing is also focused on Graphics and 3D Printing and Personalization in the commercial and industrial markets.
FCFE Details of HP Inc. shown below, US$ in millions, except per share data
|
Year |
Value |
FCFE or Terminal Value |
Present Value at 14.6% |
|
0 |
FCFE0 |
2937 |
2937 |
|
1 |
FCFE1 |
3195 |
2563 |
|
2 |
FCFE2 |
3522 |
2433 |
|
3 |
FCFE3 |
3933 |
2340 |
|
4 |
FCFE4 |
4447 |
2280 |
|
5 |
FCFE5 |
4714 |
2250 |
|
5 |
Terminal Value (TV5) |
58112 |
14804 |
|
Intrinsic value of HP Inc. |
$44203 |
|
Market cap of HP Inc. |
$35.46 Billion |
|
Intrinsic value of HP Inc. common stock (per share) |
$45.15 |
|
Current share price on 11/13/2024 |
$36.81 |
Required rate of Return
Assumptions
|
Rate of return on LT Treasury Composite(Rf) |
4.36% |
|
Expected rate of return on market portfolio(E(RM) |
13.81% |
|
Systematic risk of HP Inc.. Common stock (β) |
1.09 |
|
Required rate of return on HP Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +1.09[13.81% - 4.36%] |
14.66% |
FCFE Growth rate Forecast
HP Inc.. H-Model
|
Year |
Value |
Growth Rate |
|
1 |
g1 (PRAT Model) |
8.8% |
|
2 |
g2 (Linear Interpolation) |
10.22% |
|
3 |
g3 (Linear Interpolation) |
11.67% |
|
4 |
g4 (Linear Interpolation) |
13.09% |
|
5 |
g5 (Single stage model) |
6.00% |
2023 Ratio Calculations
|
Retention rate |
68.21% |
|
Dividend yield |
2.92% |
|
Profit margin |
6.07% |
|
Asset turnover |
1.45 |
|
Return on Asset |
8.81% |
|
Current Ratio |
0.73 |
|
EPS |
3.33 |
|
PE Ratio |
10.4 |
Sources : Form 10K of HP Inc. for the fiscal year https://investor.hp.com/overview/default.aspx , https://www.stock-analysis-on.net/ , https://finance.yahoo.com , https://companiesmarketcap.com/
Disclosures
This report is based on information obtained in good faith from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments.
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