Why Citrix Systems Shares Will Surge

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Citrix Systems (NASDAQ: CTXS  ) jumped early yesterday after Barclays Capital upgraded the cloud computing company from equal-weight to overweight.

So what: Along with the upgrade, analyst Raimo Lenschow slightly boosted his price target on the stock to $78 (from $77), representing about 11% worth of upside to where it sits now. The shares have pulled back in recent months on concerns over slowing growth, but Lenschow thinks it provides investors with a solid buy-in opportunity given the improving trends working in Citrix's favor.

Now what: Barclays sees desktop demand increasing from its trough in Q2 and expects Citrix to benefit from increased enterprise spending for the rest of 2013. "Looking at Q3 specifically, we believe desktop license growth expectations (5-8%) are much more achievable, especially given the substantially easier comp (-1% vs. 7% in Q2)," noted Barclays. "In addition, the data from our VAR survey improved over the prior survey, as no partners reported their CTXS businesses performing below plan." Of course, when you couple Citrix's worrisome margin compression with the stock's still-lofty 40-plus P/E, I'd wait for an even wider margin of safety before buying into that bullishness. 

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