In a report published Friday, Piper Jaffray analyst Katherine R. Egbert upgraded the rating on Citrix Systems, Inc. CTXS from Underweight to Neutral, while raising the price target from $60 to $75.
The analyst believes that there is a high probability of the company being to be sold or broken up unless it can achieve operational discipline. All these eventualities have the potential to drive up the stock.
"Elliott Management announced a 7% stake in Citrix yesterday morning, along with a letter to management calling for a 5% reduction in opex and a breakup or sale. Elliott expects to work on the process with management, who said they welcome the input," Egbert reported.
According to the Piper Jaffray report, the potential take out value for Citrix is estimated at $92 per share, while a breakup could bring in $68-81 per share. The analyst believes that a spin-off of the Mobility Apps business could prove to be accretive to the company's margins and cash flow.
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