HP Inc. (NYSE: HPQ) has completed its long-pending exit from the combined Hewlett-Packard. Now that the personal computer (PC) and printing business is a standalone entity, the independent research firm Argus has reiterated its very positive Buy rating. The firm also has a $16.00 price target, which would imply close to 35% upside, if it proves to be correct.

Argus is not expecting a sudden surge in growth. The firm is even modeling a 5% revenue decline on a pro forma basis for fiscal 2016, principally because of currency. Still comparable quarter sales are expected to improve as the year (2016) progresses. This could even lead to positive revenue growth in the final quarter of fiscal 2016.

One additional key aspect for the call is that HP shares trade at discounts to historical price-based multiples. Argus sees HP being at attractive valuations based on its discounted free cash flow model.

The Argus report said:

During fiscal fourth quarter, the PC business was hit hard by a 20%-plus unit decline in the EMEA market; and channel inventories remained elevated across most regions. Given’s HP Inc.’s heft and technology leadership, however, the company demonstrated its ability to gain market share from less well-capitalized rivals. PC market share came in just under 20% for calendar third quarter, with each region gaining share.

In the printing segment, industry conditions worsened during the third quarter as unfavorable currency translations intensified and demand weakened. Declining price points are also enabling consumers to buy business-grade machines, lessening use per device and impacting supplies revenue. The company has launched multiple initiatives to address these hardware and supplies issues.

Argus also feels that HP is starting out with a smaller balance sheet. The total debt is $9.7 billion, compared with $6.8 billion in cash and investments.

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HP’s CEO Dion Weisler and CFO Cathy Lesjak acknowledged after the most recent earnings report that the printing and personal systems markets are experiencing challenges that have intensified since the pre-split company’s September analyst day event. Another issue that was brought up was that the sharp drop in the euro versus the dollar made HP’s PC units too high-priced for many European consumers. PC channel inventories also remained elevated across most regions, partly reflecting less competitive pricing and partly reflecting global disruption in emerging and resource economies.

Argus also talked up how HP took market share. The report said:

As the quarter progressed, HP Inc. priced more aggressively. With better pricing in place and given HP Inc.’s heft and technology leadership, the company gained market share from less well-capitalized rivals. HP Inc.’s PC market share was 19.7% for the third quarter, as the company gained share in all three of its regional markets. The company realized commercial PC market share of 23.7% in the third quarter, its highest-ever share in this category. HP Inc. was able to boost PC margins in the fiscal fourth quarter by 0.8 percentage points sequentially. PC segment margins, however, remain weak at 3.8%, consistent with an industry wrestling with secular decline amid attractive alternatives (i.e., smart phones).

Argus further went on to show that HP has launched multiple initiatives to address hardware and supplies issues in its printing business. The firm also noted that HP believes the ink supplies market may not stabilize before 2017. Another positive is that HP is focused on achieving $1 billion in productivity improvements, while lowering its cost structure and preserving margins.

A last issue here is valuations. They are nominally cheap, perhaps for a reason — but nominally cheap nonetheless. HP now trades at 7.4 times the firm’s 2016 EPS estimate and at 6.8 times its 2017 forecast, below the average multiple of 7.3 over the past five years (for the predecessor company). The firm said:

Our comparable valuation range for HPQ is now in the low- to mid-double-digit range. Our discounted free cash flow model points to a value exceeding $33. Our blended value on HPQ exceeds $24. … We reiterate our Buy rating on HP to a split-adjusted 12-month target price of $16.

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HP shares were down one cent at $11.92 on Thursday morning. There is a discrepancy on the post-split 52-week trading ranges here. Yahoo! Finance shows the 52-week range as being $11.04 to $18.66, MarketWatch shows the 52-week range as being $11.03 to $18.66 and Google Finance shows the 52-week range as being $11.02 to $14.82

Thomson Reuters has a consensus analyst price target of $15.39.

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