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Can Lexmark Save Xerox? Maybe!
Xerox’s $1.5 billion acquisition of Lexmark could be the game-changer the struggling tech giant needs. By merging with Lexmark, Xerox aims to create a vertically integrated powerhouse, strengthening its market position and laying the groundwork for a significant expansion in the Asia-Pacific region.While Xerox faces significant financial hurdles, including negative net income and mounting debt, the Lexmark deal holds promise. The potential for operational synergies and reduced financial leverage could provide the breathing room Xerox desperately needs.
With a speculative but enticing valuation, a 5.5% dividend yield, and a target price of $15 per share, the stock presents a high-risk, high reward “Buy.” The combined forces of Xerox, Lexmark, and ITsavvy could reignite growth, offering a realistic path to upside through improved earnings and multiple expansion. Is this the turnaround Xerox has been waiting for? Only time will tell.
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