Monday, January 26, 2009

Yikes! Citi Got it Right.

"January 26, 2009 8:33 AM EST

Citi reiterates a 'Buy' on Xerox Corp (NYSE: XRX), lowers price target from $13 to $12.

Citi analyst says, 'While we are reducing 2009 revenue and EPS estimates to reflect unfavorable FX swings, we reiterate our Buy rating based on valuation and strong cash flow. The shares currently trade at just 7X our revised 2009 EPS despite a 15-20% free cash flow yield. Our revised target (down to $12 from $13 previously) suggests 71% upside during the coming year, although these gains are likely to be back-end loaded...On a more positive note, Post-sale revenue (which includes Equipment Rentals, Services, Financing and transactional supplies and paper sales) was flat yoy in constant currency during 4CQ08 excluding the impact of the supplies channel inventory correction. Moreover, mgmt cited stable renewal rates on Equipment Rental and Services contracts.'

Xerox Corporation (Xerox) is a technology and services enterprise."

"technology and services" still doesn't mean anything to real people, but at least it does no harm.

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