NEW YORK (TheStreet) -- Shares of Xerox Corp. (XRX - Get Report) are lower by -1.29% to $12.28 in pre-market trading today following a ratings downgrade to "neutral" from "buy" at Citigroup (C - Get Report).
The firm said it dropped its rating on the diversified business process outsourcing company based on a valuation call.
Citi maintained its $13 price target on the stock.
Separately, TheStreet Ratings team rates XEROX CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate XEROX CORP (XRX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, XRX's share price has jumped by 37.87%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XRX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 428.73% to $286.00 million when compared to the same quarter last year. In addition, XEROX CORP has also vastly surpassed the industry average cash flow growth rate of -19.48%.
- XEROX CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, XEROX CORP increased its bottom line by earning $0.93 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.93).
- The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: XRX Ratings Report