Citrix Systems (CTXS) PT Raised to $78 at Nomura Amid Activist Stake
Nomura Securities analyst Rick Sherlund bumped his price target on Citrix Systems (NASDAQ: CTXS) to $78.00 (from $70.00) after activist Investor Elliott Management has announced a 7.1% ownership interest in Citrix and has asked for a board seat as well as outlined a plan to enhance shareholder value.
Sherlund commented, "Citrix has struggled to enhance value through both restructuring efforts and an accelerated share repurchase program, and the pace and magnitude of change has been slow and frustrating to many investors we speak with. Citrix would potentially be an awkwardly large-sized LBO for private equity at an enterprise value of $10.8bn. Additionally, as an aggregation of several unrelated businesses, it may also be uninteresting to potential strategic buyers. Elliott appears focused on the combination of a more radical change in the cost structure of the business and potentially spinning out portions of the company. We are Neutral rated on the stock but believe there is a lot that can be done to enhance shareholder value if Elliott Management can gain the support of other shareholders and get a board seat in an attempt to influence corporate direction. We are raising our PT to $78 from $70, given that the stock is currently at our prior PT. We expect multiple expansion given potential upside due to activist interest."
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Shares of Citrix Systems closed at $65.97 yesterday.