Upgrade of the Day: Xerox

Barclays lifted Xerox (NYSE:XRX) to Overweight this morning, predicting investors "will get increasingly more comfortable with Xerox's cash generation capabilities" as things stabilize. Shares could appreciate further "into the early stages of a major buyback program," which Barclays thinks could begin next year.

By Eric Savitz (Barron's) -- Xerox (XRX) shares are up 3.5% today after Barclays Capital analyst Ben Reitzes raised his rating on the stock to Overweight from Equal Weight, lifting his price target to $12, from $8.

“As the environment stabilizes, we believe investors will get increasingly more comfortable with XRX’s cash generation capabilities and believe that shares can appreciate further into the early stages of a major buyback program,” he writes. “XRX is poised to restart making significant repurchases next year.”

Reitzes reports that checks indicate the printer/copier market has stabilized, although he does not expect any revenue upside through 2009. The Barclays analyst writes in a research note that the company has long-term earnings potential of at least $1 a share; he is forecasting 54 cents this year, 76 cents next year and 92 cents in 2011.

SOURCE: http://blogs.barrons.com/techtraderdaily/2009/09/15/xerox-barclays-upgrades-sees-buybacks-ahead/