Needham & Company Upgrades Citrix Systems (CTXS) to Buy
Needham & Company upgraded Citrix Systems (NASDAQ: CTXS) from Hold to Buy with a price target of $82.00.
Analyst Scott Zeller commented, "We are upgrading Citrix Systems based on the prospect of change due to Thursday’s announcement of Elliott Associates as a 7.1% holder, and Elliott’s open letter to CTXS’ board of directors. We have been cautious on CTXS due to a lack of positive catalysts operationally, as well as field contact information that suggested low enthusiasm for the Workspace Suite. If Elliott is capable of gaining a Board seat(s), it is conceivable they may achieve the outcome we have seen with Riverbed, Blue Coat and other activist investments, which would include improved operating profile and/or a sale of CTXS or its parts. Both a “sum of parts” and “cost cutting” analysis each suggests shares are currently undervalued. Our new target of $82 is based on CY17 potential EPS of $5.17/share and a 15x P/E ratio, post-cost cutting."
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Shares of Citrix Systems closed at $70.39 yesterday.