Trade of the Day: CTXS Stock Breakout Could Vault Shares 20%-Plus

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Citrix Systems, Inc. (CTXS) — I last featured CTXS stock in the Trade of the Day on June 18. This was shortly after Elliott Management announced a 7.1% stake in the software company’s stock. The activist hedge fund demanded that management boost shareholder value, and they indicated that they are willing to make changes.

As a result, several Wall Street firms bumped up their price targets on CTXS stock. This included Credit Suisse Equity Research, which raised its target to $85 from $77.50.

Credit Suisse analysts note that Citrix is a potential takeover target. Based on the company’s financial metrics and Credit Suisse’s statistical analysis, they said CTXS stock warrants a buyout price between $82.59 and $86.53 per share.

They forecast earnings will increase 5.4% in 2015 to $4.48 per share, and then jump another 12.3% in 2016 to $5.03.

On Tuesday, Citrix announced it will provide products and tools to assist with the migration to Windows 10 for Microsoft Corporation (MSFT) customers.

Technically CTXS stock is completing a bullish “deep V” that broke higher from a golden cross (50-day moving crosses up through 200-day moving average) in June.

Very high volume on the breakout produced a gap from $68 to almost $72, which, as expected, has been closed. This sets CTXS stock up for a follow-through and resumption of the breakout. MACD is also arching up, another indication that the breakout is genuine.

Since market conditions are currently volatile, a buy under price of $68, the 50-day moving average, may offer traders a chance to get in at a bargain price. My four-month trading objective for CTXS stock is $85, which would result in a gain of 25%.

CTXS Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2015/07/citrix-systems-inc-ctxs-stock-trade-of-the-day-2/.

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