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Xerox (NASDAQ:XRX) has attempted to reinvent themselves this year through a major restructuring effort, but its stock still received a Sell rating from Citi as the bank initiated coverage.
Citi also set a price target of $11 for the printing company.
“The company is undergoing major restructuring in the face of flat-to-declining revenues, which is further compounded with the company’s pivot to the specialized Digital/IT services markets which CITI believes will require significant time/investments and a potential headwind to their operating income improvement goal,” said Citi analyst Asiya Merchant, in a Friday note.
Xerox was struck particularly hard by the pandemic, and has failed to recover. Shares plunged another 33% year to date despite an attempt to reshape the company, which included culling 15% of its workforce.
“Post-pandemic, it remains difficult for investors to have confidence in Xerox’s combination of continued restructuring and cost-cutting, while simultaneously refocusing the company on a fragmented, competitive, and OpEx-intensive Services market while concurrently improving margins to double digits,” Merchant added.
Xerox has a Hold rating from Seeking Alpha analysts and a Sell rating from Wall Street analysts. It also has a Hold rating from Seeking Alpha’s Quant system, which regularly beats the market.