UPDATE: Jefferies Cutting Price Target On Office Depot (ODP)

Jefferies & Co. is cutting its price target on shares of Office Depot ODP to $4 from $5, and it has a Hold rating on shares. In a note to investors, Jefferies writes, "Management recently guided 1Q EBIT margin down 50% y-y and released amended financial statements for the second, third and fourth quarters of 2010. We expect concerns around earnings quality, negative top line growth and market share risks to continue to weigh heavily on the stock. We are adjusting our 1Q11 EPS to $0.03 from $0.08, reflecting our lowered expectations on EBIT margin following the company's recently preannounced results. We are also lowering our FY11 and FY12 EPS to ($0.08) and +$0.08 from ($0.01) and +$0.15, respectively. Management does not appear ready to break up the company as it continues to focus on its restructuring initiatives and a long-term 4-5% operating margin goal. We think the company could be worth $6-7 on a break-up." Shares of ODP are down 2 cents to $4.22, a loss of 0.5% in early Monday trading.