UBS Downgrades Citrix Systems (CTXS) to Sell
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UBS downgraded Citrix Systems (NASDAQ: CTXS) from Neutral to Sell with a price target of $81.00, saying the next phase of transition is likely to be the hardest.
Analyst Brent Thill commented, "CTXS shares have outperformed YTD +13% (vs. NASDAQ +6%) driven by significant margin improvement (1H15 op margin of 28.5%, +640 bps y/y), qtrly results above conservative guidance, and streamlining of the overall business. We think the next leg of the story will prove more difficult, as investor attention shifts back towards the core workspace services business. In this report we take a detailed look at revenue growth and margin trajectory going forward as well as what the core business looks like without GoTo. We move our rating to Sell given all of the moving pieces, and continue to favour VMW at lower multiples (10.5x EV/FCF, 12.5x P/E ex-cash vs. 13x, 15x for CTXS on CY17e)."
Shares of Citrix Systems closed at $85.22 yesterday.
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