Icahn to Accelerate Xerox (XRX) Restructuring - Piper Jaffray

Carl Icahn disclosed a 7.1% stake in Xerox (NYSE: XRX) Monday evening (11/23), making him the second largest shareholder behind Vanguard. Piper Jaffray analyst, George Tong, believes Icahn's involvement can fast track Xerox's existing strategic realignment actions and serve as a positive catalyst for the shares.

Icahn characterized XRX shares as "undervalued" and intends to work with management to identify means to improve operating performance and consider strategic alternatives. On its earnings call, Xerox announced intentions to conduct a comprehensive portfolio review and capital allocation review to improve value for shareholders. All potential strategic actions excluding an outright sale are on the table, including a break-up of the business, divestitures, acquisitions, de-emphasis or re-emphasis of certain businesses, and special dividends or accelerated buybacks funded by incremental financial leverage.

This year, Xerox closed on the divestiture of its IT outsourcing business and de-emphasized its volatile government healthcare practice. The analyst expects further strategic realignment actions to unlock additional potential value for shareholders.

No change to Overweight rating or $15 PT.

For an analyst ratings summary and ratings history on Xerox click here. For more ratings news on Xerox click here.

Shares of Xerox closed at $10.75 yesterday.

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