Citrix: 'But Wait, There' More!' Says Wall Street

Citrix Systems, Inc.CTXSdelivered a letter to the company's board of directors on Thursday.

The activist investor urged the company to explore strategic options that could boost shares to the $90 to $100+ range by the end of 2016.

Here is what three of Wall Street's top analysts are saying.

Credit Suisse: Management Will Be ‘Compelled' To Make Changes

Philip Winslow of Credit Suisse commented in a note that Citrix's management will be "compelled" to make more organizational changes than it already announced. The analyst sees at least one of four of the following outcomes occurring, all of which could drive further "meaningful" upside to the stock.

• 1) The analyst's financial metrics resulted in a takeout price of $86.53, while a sum-of-the-arts M&A valuation yielded a value of $82.59 per share
• 2) A tax-free spinoff of Citrix Online could be valued at $3.3 billion, which in turn will value Citrix's stock in a range of $80.20 to $88.95 per share
• 3) A private equity firm could pay $87.99 per share and still earn a 17.0 percent internal rate of return on its investment
• 4) Shareholders will compel management (if no major divestitures are made) to streamline operations, which could help drive shares to at least $85

Shares remain Outperform rated, with a price target raised to $85 from a previous $77.50.

Related Link: Citrix Continues To Rise After Multiple Wall Street Firms Upgrade Stock

Piper Jaffray: High Probability Of Breakup Or Sell

Katherine Egbert of Piper Jaffray commented in a note that Elliott Management's track record of unlocking shareholder value translates to a "high probability" that Citrix will be broken up, sold or led to an operational discipline that will boost shares higher.

According to Egbert's calculations, Citrix could be valued at around $92 per share in a takeout. Under a breakup of the company, shares would be valued in a range of $68 to $81.

Shares were upgraded to Neutral from Underweight with a price target raised to $75 (midpoint of $81 and $68 takeout range) from a previous $60.

Related Link: Elliot Management Made Citrix Investors Very Happy Today

Bank Of America: Expectations For Margin Expansion And Restructuring

Kash Rangan of Bank of America commented in a note that if Citrix were to spin out or divest its Networking and SaaS businesses and focus on its core WorkSpaces/Virtualization business, the three separate entities could grow faster and achieve higher margins individually. Under this scenario, the analyst estimated shares could be valued at around $94.

Rangan did however note that Elliott Management's plan mostly calls for expense reductions but also focuses on divestitures.

Shares were upgraded to Buy from Underperform with a price target raised to $82 (based on $5 of EPS at a 16x multiple) from a previous $65.

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