Xerox Holdings Corp: 2Q26 Review: Setup into Back-Half Becomes Clearer, But Cost Inflation and Leverage Weigh on Earnings; Reiterate UW

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Xerox Holdings Corp: 2Q26 Review: Setup into Back-Half Becomes Clearer, But Cost Inflation and Leverage Weigh on Earnings; Reiterate UW

J P M O R G A N North America Equity Research

30 July 2026

Xerox Holdings Corp

2Q26 Review: Setup into Back-Half Becomes Clearer, Underweight

But Cost Inflation and Leverage Weigh on Earnings; XRX, XRX US

Reiterate UW Price (30 Jul 26):$3.49

IT Hardware/ Telecom & Networking

Xerox delivered 2Q revenue slightly above expectations and raised its full-year Equipment

2026 outlook, the latter reflecting improving visibility on the back-half revenue Joseph Cardoso AC

pipeline. 2Q revenue benefitted from strength in Supplies, offsetting softness in (1-212) 622-9036

Mid-range and Services. Meanwhile, IT Solutions billings growth slowed in 2Q as joseph.cardoso@jpmchase.com

new sellers built out their pipeline, with management expecting better conversion Marc Vitenzon

in 2H. Xerox also expects Equipment Sales to improve in 2H, driven by Entry at (1-212) 622-3342

marc.vitenzon@jpmchase.com

the low-end, where demand outran supply in 2Q, and Production at the high-end,

Manmohanpreet Singh

with both markets characterized as healthy and growing. Taken together, the Print

(1-212) 622-4527

and IT Solutions back-half pipelines supported the increased revenue outlook for manmohanpreet.singh@jpmchase.com

the full-year, given improving visibility and stable demand. At the same time, Akanksh Chauhan

while 2Q margins beat when normalizing results for the $105 mn tariff refund in (1-212) 622-0045

2Q, the normalized operating margin outlook and the free cash flow guide akanksh.chauhan@jpmorgan.com

remained unchanged despite higher revenue. This reflects increasing Lexmark J.P. Morgan Securities LLC