Xerox S&P's Top Pick For The Week (XRX)
December 13, 2010 4:33 PM
Xerox Corporation (NYSE: XRX) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. Xerox carries S&P's highest investment recommendation of five stars, or Strong Buy.
"We believe Xerox is a major player in both the global document management and business process outsourcing industries, and has the potential to gain market share based on new products, small acquisitions, and synergies following its February 2010 acquisition of Affiliated Computer Services (ACS)," said Tom Smith, Information Technology Equity Analyst at Standard & Poor's Equity Research. "The overlap of the customer lists with ACS at the time of the merger was only about 20%, so we believe there is ample opportunity for cross-selling on the enlarged customer list."
Smith sees an improvement in earnings visibility for Xerox, created by a substantial increase in the portion of revenue derived from services, which are typically tied to long-term contracts, which he believes should encourage a higher valuation level for the company's shares.
