Xerox stock price target cut to $4.50 by Loop Capital

On Wednesday, Loop Capital made a significant adjustment to the price target for Xerox (NASDAQ:XRX) shares, reducing it from $8.00 to $4.50, while maintaining a Hold rating on the stock. The firm’s analyst, Ananda Baruah, provided insights into the decision, citing several factors impacting the stock’s valuation. The adjustment comes amid a challenging year for Xerox, which has seen its stock decline by 46% year-to-date, according to InvestingPro data.

Baruah noted that Xerox’s stock valuation metrics have shifted significantly, with the company now trading at just 0.52 times book value, according to InvestingPro data. The reduction reflects Loop Capital’s inability to clearly discern the macroeconomic factors at play, as well as Xerox’s ongoing efforts to identify and leverage fundamental business catalysts. Notably, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels, with multiple additional insights available for subscribers.

The analyst also pointed out that various dynamics influence stock performance during risk-averse market conditions, which can differ from the underlying fundamentals of the company. This observation suggests that the current market environment is affecting how investors are valuing Xerox shares.

Despite the lowered price target, Loop Capital’s Hold rating indicates a neutral stance on Xerox’s stock, suggesting that the firm does not see enough positive or negative indicators to recommend buying or selling the shares at this time.

Xerox, known for its printing and digital document products and services, has been navigating a challenging business landscape. The company’s efforts to evolve and introduce fundamental catalysts are being closely watched by investors and market analysts alike.

Investors and market participants will continue to monitor Xerox’s performance and strategic initiatives, as well as broader market conditions, to assess the potential impact on the company’s stock value in the future.

In other recent news, Xerox Holdings Corporation reported a significant miss in its fourth-quarter 2024 earnings, with earnings per share (EPS) of $0.36 falling short of the expected $0.67, and revenue coming in at $1.61 billion against forecasts of $1.69 billion. This underperformance led to a notable decline in Xerox’s stock. Additionally, Xerox has issued $800 million in senior secured notes to finance the acquisition of Lexmark International II, LLC, and manage existing debt obligations. The acquisition, anticipated to close in the second half of 2025, is expected to enhance Xerox’s market position and improve its debt to EBITDA ratio.

Moody’s Ratings has confirmed Xerox’s B2 corporate family rating and assigned a Ba2 rating to its new senior secured notes, with an outlook revised to stable. The acquisition of Lexmark is seen as credit positive, with expected improvements in Xerox’s market coverage and operational efficiencies. Furthermore, Xerox declared dividends for its common and preferred stock, maintaining its commitment to shareholder value. These developments are part of Xerox’s broader strategy to strengthen its financial position and expand its market reach through strategic acquisitions and financial restructuring.

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