XRX Should I Buy
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Xerox Holdings Corp (XRX) is not a strong buy for a beginner, long-term investor at this time. While the company has shown revenue growth and strategic initiatives like the Lexmark acquisition, the stock's technical indicators are bearish, options sentiment is negative, and analysts have lowered price targets. The financial performance, though improving, still shows a net loss. Given the investor's preference for long-term stability, it is better to hold off on buying this stock until clearer positive trends emerge.
The technical indicators for XRX are bearish. The MACD histogram is negative and contracting, RSI is neutral at 36.831, and moving averages show a bearish trend (SMA_200 > SMA_20 > SMA_5). Key support levels are at 1.859 and 1.735, with resistance at 2.26 and 2.384. The stock is trading below its pivot point of 2.06, indicating downward pressure.
Xerox's acquisition of Lexmark aims to expand its global footprint and enhance service capabilities. The joint venture with TPG raised $450 million to enhance liquidity and optimize the capital structure. The company expects $200 million in operating income growth by 2026.
Analysts have lowered price targets, with Citi reducing the target from $3.50 to $2.50 and maintaining a Neutral rating. The stock is trading at $1.89, below its recent levels, and technical indicators suggest bearish momentum. Options data also reflects a bearish sentiment.
In Q4 2025, Xerox's revenue increased by 25.73% YoY to $2.028 billion. Net income improved by 216.67% YoY but remains negative at -$76 million. EPS increased by 210.53% YoY to -0.59. Gross margin dropped by 5.41% YoY to 26.92%. While revenue and net income trends are improving, the company is still operating at a loss.
Citi analyst Asiya Merchant lowered the price target from $3.50 to $2.50 and maintained a Neutral rating, reflecting a lack of confidence in the stock's near-term potential.
