After the market close on Wednesday, the Palo Alto, CA-based computer company reported 2016 first quarter earnings that were in-line with analysts' forecasts.
Still, HP faces light cash-flow, mid-level leadership changes and deferred market recoveries, which paint "a pretty bleak picture," Barclays said.
The company may need to consolidate its PC and Printing divisions in order to prevent a spiral in both markets, the firm added.
"We are surprised HP is not drastically cutting its full-year EPS outlook for extra breathing room with a kitchen sink," the firm said. "Self-help in tough times typically means things worsen first, so why not cut now?"
HP stock is down by 6.84% to $10.08 in early-morning trading on Thursday.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B-.
HP's strengths such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures outweigh the fact that the company shows low profit margins.
You can view the full analysis from the report here: HPQ
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.