Staples Has $24 Target At International Strategy & Investment (SPLS)

International Strategy & Investment Group Inc. has a $24 price target and Buy rating on shares of Staples SPLS after the company reported earnings yesterday that were stronger than expected. In the research report, International Strategy & Investment Group Inc. writes, "Looking ahead to the rest of the year, Staples was the latest company to post a cautious outlook, forecasting that total sales for the year would be up in the low single-digits. The 9% comp decline at Staples’ European stores was the stand-out in what was overall another set of solid results. Despite the slightly weaker than expected consolidated top-line, all three businesses improved operating margins YoY. In addition, SPLS’ resumption of its share repurchase program highlights cash flow strength. The company resumed its share repurchase program after suspending buybacks in 2008, due to the acquisition of Corporate Express." Later in the report, the investment firm says, "We believe FCF can stay comfortably above $1bn, and lease adjusted RNOA could get back to the mid-teens by 2013. We view SPLS’ FCF yield of 8% and the potential for further buybacks as an attractive entry point, despite a slower than expected white-collar employment recovery." Shares of Staples, Inc. are down 24 cents to $18.70 today.