former bull turns bear.
regards
from standard and poor's
We downgraded the shares to hold, from buy, in the wake of the October 8, 1999, earnings preannouncement. The shares dropped sharply following the news, and are now down sharply for the year. Although we feel XRX is still well positioned for the long term with leading technology, a broad product line, and a dominant brand name, we can no longer recommend the shares, due to the lack of revenue growth, margin pressures, and sudden credibility issues. As recently as a few weeks ago, XRX was reassuring analysts that there was no change in its revenue and earnings outlook. As a result, its preannouncement came as a nasty surprise. Although the shares are trading at a discount to the market P/E, and are near the low-end of XRX's historical range, we do not recommend adding to positions until the company is able to restore credibility by hitting forecasts and improving its revenue outlook. |
