According to Evercore ISI, HP shares could see a “downside bias” as the company tackles a tough market for PCs later this year. Analyst Amit Daryanani downgraded HP’s shares in line with outperformance, saying in a Monday note that the company’s earnings, which favor Warren Buffett’s Berkshire Hathaway, could be hurt by bigger challenges ahead. “We are reducing our projections for FY22/23 to reflect a confluence of headwinds around the PC and commodity markets that could negatively impact HPQ,” Daryani wrote. Evercore lowered the price target from $43 to $36. The new price target is still about 13% higher than Friday’s closing price for HP. HP is a favorite of Buffett, who launched a sizable stake in the company earlier this year to become its largest shareholder. The analyst believes that lower consumer demand due to rising prices will hurt the PC market, which has already experienced a slowdown due to the ongoing war in Ukraine and the COVID restrictions in China. Evercore ISI believes that the total addressable market for PC units could be 300 million at the end of the year, instead of the currently expected 325 to 330 million. The analyst also expressed concern that higher inventory levels in a deflationary environment for commodities could hurt PC companies. Evercore ISI noted that HPQ’s purchase commitment level is still above its pre-pandemic levels. “Net/Net: We expect the PC headwind @ HPQ to be more severe and higher inventory levels in a deflationary environment, disrupting both sales and margins,” Daryanani said. HP shares were down 2% in Tuesday’s premarket trading. —CNBC’s Michael Bloom contributed to this report.