NEW YORK, Dec. 13, 2010 /PRNewswire/ -- Xerox Corporation (XRX: $12) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. XRX carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"We believe Xerox is a major player in both the global document management and business process outsourcing industries, and has the potential to gain market share based on new products, small acquisitions, and synergies following its February 2010 acquisition of Affiliated Computer Services (ACS)," said Tom Smith, Information Technology Equity Analyst at Standard & Poor's Equity Research. "The overlap of the customer lists with ACS at the time of the merger was only about 20%, so we believe there is ample opportunity for cross-selling on the enlarged customer list."
Smith sees an improvement in earnings visibility for Xerox, created by a substantial increase in the portion of revenue derived from services, which are typically tied to long-term contracts, which he believes should encourage a higher valuation level for the company's shares.
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S&P Global STARS Distribution
In North America
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 39.2% of issuers with buy recommendations, 52.5% with hold recommendations and 8.3% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 36.6% of issuers with buy recommendations, 43.2% with hold recommendations and 20.2% with sell recommendations.
As of September 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 46.8% of issuers with buy recommendations, 44.4% with hold recommendations and 8.8% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 39.5% of issuers with buy recommendations, 50.2% with hold recommendations and 10.3% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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