11:46 AM EDT, 08/29/2024 (MT Newswires) -- HP's (HPQ) personal systems group revenue showed strength in fiscal Q3 and is likely to accelerate in fiscal 2025 driven by strength in PCs but the print business faces ongoing challenges due to aggressive pricing from competitors due to the weak yen, UBS Securities said in a note emailed Thursday.

UBS said PSG revenue increased 5.3% in constant currency during the quarter and is expected to grow about 3% in both fiscal Q4 and fiscal 2025.

"Our optimism is tempered as we expect Supplies revenue to continue to decline in [fiscal Q4] and next year while it's too early to call a turn in Print Hardware. As such, growth in PCs should be partially offset next year resulting in 2% to 3% consolidated growth," UBS analysts said in the note.

The competitive pricing pressures are impacting margins and revenue of the print segment resulting in lower-than-expected earnings per share and operating margins, according to the note.

The company's anticipated $1.3 billion in cost savings by the end of fiscal 2024 under its future-ready plan, along with an increase in share repurchase authorization, will likely offset some of the pressures, the firm said.

UBS raised its price target on HP's stock to $37 from $34 and kept its neutral rating.

Shares of the company were up 5% in recent trading.

Price: 36.56, Change: +1.80, Percent Change: +5.16