Supply Chain Constraints and Delta Variant Slow Down No-Moat Xerox’s Top Line Recovery; $18 FVE

No-moat Xerox reported disappointing third-quarter results and reduced its full-year revenue guidance due to lower printing demand as a return to offices was delayed. In addition to bleak near-term macroeconomic conditions, we remain concerned about the long-term structural decline in the printing landscape as consumers and companies wean off paper usage. As a result, we are reducing our fair value estimate to $18 from $22 for no-moat Xerox. Shares are down about 12% after earnings and appear fairly valued.