Morgan Stanley Upgrades Citrix On Work-From-Home Boost

Citrix Systems, Inc. CTXS is poised to benefit from rising demand from businesses to enable work-from-home computing capabilities for their entire workforces amid the coronavirus outbreak, according to Morgan Stanley.

The Citrix Analyst

Morgan Stanley’s Sanjit Singh upgraded Citrix Systems from Equal-Weight to Overweight and raised  the price target from $139 to $160.

The Citrix Thesis

The work-from-home trend should act as a catalyst for the next leg of subscription transition and enable Citrix Systems to exceed management's free cash flow target of $10 per share for 2022, Singh said in the upgrade note. (See his track record here.)

The company is among the key beneficiaries of businesses allowing employees to securely access their enterprise applications, desktops and files from any device, the analyst said. 

"In particular, we think Citrix benefits from a clear incumbency advantage given a customer base of over 400K, over 100 million users and the leading market share in virtual client computing that best positions the company to satisfy the rising demand for remote computing technology."

Citrix Systems is among the few companies with the potential to exceed estimates amid a weaker macro environment, Singh said. 

When employees eventually return to the office, the company will have the opportunity to expand its average seat penetration within the customer base as businesses rethink their continuity strategies, the analyst said. 

CTXS Price Action

Shares of Citrix Systems had risen were trading 3.47% higher at $126.23 at the time of publication Wednesday. 

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