Morningstar

Morningstar, Inc.

Equity Bottom-Up

Xerox is an original equipment manufacturing and software company for print industry solutions. Specializing in enterprise print equipment, largely multifunction printers (printers that can print, copy and scan) ranging from A3 to A4 paper sizes, Xerox has been a leader in the print space. In 2018, equipment sales were 22% of revenue and post sales, a subsegment dependent on offering print supplies and equipment servicing, was 78%. We think the print industry is in a jam as the workplace becomes…

Xerox reported first-quarter results with significant revenue declines countered by improving profitability. The mixed earnings are in line with our thesis that the company’s seemingly ambitious cost-cutting initiatives are obtainable, but flat or growing revenue is not in the queue for Xerox over the next five years--counter to the company’s outlook. As a result of cost-cutting initiatives significantly hitting the bottom line, Xerox improved its EPS outlook for 2019. Accounting for the…

We fear that Xerox, the eponymous maker of copy machines, is losing its edge in the competitive enterprise print industry. Despite our belief that this high uncertainty, no-moat name has bleak growth prospects, we think Xerox can execute on major cost-cutting initiatives. As a result, we are raising our fair value estimate for Xerox to $30 from $27.50. Still, we believe investors should wait for a higher margin of safety before investing in Xerox
We think the print industry is in a jam as the…

United States

Xerox Holdings Corporation operates as a holding company. The Company, through its subsidiaries provides printers, scanners, supplies, and accessories. Xerox Holdings serves health care, insurance, government and retail sectors worldwide.

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