Technology major HP Inc. (NYSE: HPQ) recently announced that it has acquired a packaging development company, Choose Packaging. The financial terms of the deal have been kept under wraps.
Following the news, shares of the company rose 1.9% on Wednesday. The stock, however, pared its gains slightly to close at $38 in the extended trading session.
Strategic Impact
The buyout is in line with HP’s strategy to gain a strong foothold in the sustainable packaging market, as the company aims at disrupting this market with fiber-based, 100% plastic-free packaging. In this regard, Choose’s technology provides an alternative to plastic bottles and can hold a wide variety of liquid products.
With the addition of Choose, HP can now focus on improving its technology to cater to the needs of this market.
Management Commentary
The Chief Strategy & Incubation Officer at HP, Savi Baveja, said, “This acquisition is a great example of how we continue to strengthen our capabilities in attractive verticals like sustainable packaging while also driving progress against HP’s broader sustainability goals. Choose has built a truly differentiated technology and we are excited to welcome this talented team to the HP family.”
Stock Rating
Recently, Evercore ISI analyst Amit Daryanani reiterated a Buy rating on the stock with a price target of $42, which implies upside potential of 10.1% from current levels.
Consensus among analysts is a Hold based on 1 Buy, 5 Holds and 1 Sell. The average HP stock prediction of $36.43 implies downside potential of 4.5% from current levels. Shares have gained 51.3% over the past year.
Positive Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on HP. Further, 3.3% of portfolios tracked by TipRanks increased their exposure to HP stock over the past 30 days.
Download the TipRanks mobile app now
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Read full Disclaimer & Disclosure
Related News:
Alphabet: Upbeat Q4 Results; 20-for-1 Stock Split in the Works
General Motors Posts Mixed Q4 Results
Electronic Arts Tanks 3% as Q3 Earnings Miss Estimates
