Analyst Note| Malik Ahmed Khan |
No-moat Xerox reported disappointing fourth-quarter results with guidance for the upcoming year below our expectations. The time value of money offset the weak financial results' impact on our fair value estimate following our valuation model roll. As a result, we are maintaining our $13 fair value estimate for the no-moat name. While a mixture of supply chain and macro headwinds continue to drive financial weakness for the firm in the near term, we are also bearing on Xerox's long-term prospects as the print industry continues to remain in secular decline. Despite shares being down 5% after the earnings release, we think that the market is overvaluing Xerox's business and would encourage investors to steer clear of this name.