Oppenheimer Maintains Perform on Office Depot

Oppenheimer is out with its report today on Office Depot ODP, maintaining Perform. In a note to clients, Oppenheimer writes, "A still very challenging economic environment and particularly weak white collar jobs growth continue to weigh significantly upon sales growth in the office products retail category. The tone of ODP management implies to us that sales growth at the chain is likely to remain soft in the near term. Neil Austrian assumed the role of permanent CEO at ODP in May. Our conversation with Mr. Austrian suggests that he sees significant 'internal potential' in the ODP business model, but is also very open to the idea of industry consolidation and a potential transaction with OfficeMax. We view potential consolidation amongst leading office products chains as a 'game changing' driver of better returns for the entire category. Our Perform rating reflects a near-term challenged fundamental outlook for ODP." Oppenheimer maintains a $5 PT on ODP. Shares of ODP closed Friday at $3.82.