11:33 AM EDT, 09/27/2024 (MT Newswires) -- HP's (HPQ) earnings per share growth will be driven by share buybacks as any potential gains from its personal computer segment will be offset by lower print margins, BofA Securities said in a note Friday.

BofA analysts expect print margins which have been unusually high will normalize, balancing any potential gains from personal computer sales, including AI personal computers.

Despite the strength in subscription plans like Instant Ink, pricing pressure from competitors benefiting from a weaker yen could lead to continued challenges in print margins, with the risk of further downside impacting overall earnings, according to the note.

BofA also said several factors will improve HP's performance, including stronger personal computer demand, improvement in free cash flow driven by tighter cost control, and additional restructuring savings, among others.

Furthermore, HP's free cash flow is expected to stabilize at around $3.5 billion, with estimates of $3.4 billion in fiscal 2024, as growth will be constrained by headwinds from the printing division, the analysts said.

BofA downgraded HP's rating to neutral from buy and kept the price objective at $37.

Shares of the company fell over 3% in recent trading Friday.

Price: 35.65, Change: -1.21, Percent Change: -3.27