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Xerox Gets Muti-Bank Stock “Sell” Rating (XRX):
Structural Declines in Print and Difficult Restructuring Efforts.
Rating Initiation: Citi analyst has initiated a Sell rating on Xerox (XRX). Challenges in the Market: Xerox faces structural declines in print revenues.Pivot to Digital/IT Services: Xerox is transitioning toward Digital/IT services, which demands significant investments and time. However, this shift poses a risk to Xerox’s goal of improving operating income.
Intensive Restructuring: While necessary, Xerox’s restructuring efforts may not instill confidence among investors due to the competitive Services market.
Estimates Below Guidance: Merchant’s analysis suggests substantial hurdles in executing Xerox’s strategic goals, resulting in estimates below the company’s own guidance.
Valuation and Financial Flexibility: Xerox’s valuation reflects a discount compared to peers. While cash flow for debt obligations is not at risk, R&D investments and dividend commitments may limit financial flexibility.
Core Revenue Pressures: Xerox faces challenges in achieving targeted operating margins by FY24.
For more details, you can read the full article here.
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