Xerox Earnings: Sales Decline as Macro Uncertainty Continues to Pressure Spending on Printing

We are maintaining our $15 fair value estimate for no-moat Xerox after the firm kicked off fiscal 2024 with disappointing results on both the sales and profitability fronts. While management maintained its fiscal 2024 targets, implying a better-than-expected performance in the remaining three quarters of the year, we remain pessimistic about Xerox's long-term opportunity as its core business remains in secular decline. We reiterate our thesis that Xerox is an old dog trying to learn new tricks in an increasingly digitized landscape where printing is not as essential as it once was. The firm's shares sold off sharply after the earnings report, and we now view shares as fairly valued.