Citrix Systems Management Changes Not Concerning, Says MKM

MKM Partners said it would be a buyer of Citrix Systems, Inc. CTXS shares on any weakness, as it is not concerned with the recent executive departures and sees the closing of the LogMeIn Inc LOGM transaction and consequent share buyback as positive catalysts.

Exec Changes

Last week, Citrix announced the departure of two senior executives, Klaus Oestermann, who headed the application delivery business, and Jesse Lipson, who headed Citrix Cloud, including ShareFile.

“News of these departures may pressure the shares but our sense is they are not fundamentally driven,” analyst Kevin Buttigieg wrote in a note.

The analyst believes the changes are likely more a function of CEO Kirill Tatarinov making his mark on the organization.

Spinoff

Further, Buttigieg noted that the terms of its GoTo business spinoff to LogMeIn are largely in line with his original expectations. The closing date is expected to be January 31.

“At current prices, there is about a 4 percent arbitrage opportunity between CTXS and LOGM, down from about 10 percent since our note on the transaction on November 30 as CTXS stock has appreciated and LOGM has stayed largely the same,” Buttigieg highlighted.

In addition, the spinoff should pave way for share buybacks, which the analyst expects boost 2017 EPS by 4–8 percent depending on the size/timing.

Buttigieg reiterated his Buy rating on Citrix shares, with a price target of $100.

At last check, shares of Citrix Systems were down 0.46 percent at $90.60.