Morgan Stanley turns cautious on PC complex: forecasts 28% Y/Y Q4 shipment decline; Dell kept Equal Weight at $499, HPQ underweight at $19
What happened
Morgan Stanley analyst Erik Woodring turned more cautious on the PC complex in a note published around October 9-10. He forecast PC shipments deteriorating further in Q4 with a 28% year-over-year decline, and expects weakness to stretch into 2027, with calendar-year 2027 shipments falling 11% from 2026 levels — about 7% worse than the Wall Street consensus. Woodring estimates HP and Dell saw PC unit sales drop 32% and 27% respectively in the third quarter, citing IDC research showing Q3 shipments down 21% year over year. He named HP and Acer as his highest-conviction global PC OEM underweights, with a $19 price target on HP Inc, and kept Dell at Equal Weight with a $499 target, saying Dell should hold up better because it is more focused on higher-end machines and enterprise deals. He also warned PC makers may not be able to fully pass along higher supply costs, which could drag on profits.
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Start your free 14-day trialWho’s affected
- DELL — kept Equal Weight with $499 target (~15% below ~$587 market price); expected to hold up better than HP/Acer on higher-end and enterprise mix, but PC is a real drag on the story
- HPQ — highest-conviction global PC OEM underweight; $19 price target implies ~41% downside
- ACER — flagged as underweight alongside HPQ on concentration in lower-end computers
- Memory/PC supply chain and distribution names — channel partners avoiding inventory build as demand weakens
Sources