NEW YORK (TheStreet) -- Xerox (XRX) shares were reiterated as an "overweight" rating and $15 price target by analysts at Morgan Stanley (MS) on Thursday.
The reiteration is an expression of confidence the firm has in the company's leadership following the ascension of Kathy Mikells to CFO in March 2013.
"We left with greater confidence that management clearly recognizes where XRX had issues in the past and understands how they can leverage their track records of success to drive consistent results going forward," said analysts.
Xerox shares are flat in pre-market trading at $13.71.
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 a number of 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, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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 36.27%, 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.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- XEROX CORP' earnings per share from the most recent quarter came in slightly below the year earlier 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 ($1.11 versus $0.93).
- Despite the weak revenue results, XRX has outperformed against the industry average of 12.2%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: XRX Ratings Report
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