In a report published Thursday, Bank of America analyst Denise Chai upgraded the rating on Office Depot ODP from Underperform to Buy, and raised the price target from $3.50 to $6.50.
In the report, Bank of America noted, “With the merger with OfficeMax completed on Nov 5 and the stock down 10% since 11/1, we are turning positive on the potential for cost synergies, particularly with the announcement of a new outside CEO with substantial turnaround experience. We are moving to a Buy rating and lifting our PO to $6.50 (21% upside potential), now based on 5.4x 2015E EV/EBITDA (previously $3.5 based on 0.1x Price/Sales for stand-alone ODP). On a P/E basis, our PO is based on 12x 2015E EPS vs. 9x for SPLS. Our new estimates for the combined entity are: $(0.02) EPS in 2013 based on a (2.8)% comp, $0.32 EPS in 2014 (-2% comp); $0.54 EPS in 2015 (flat comp) and $0.76 EPS in 2016 (flat comp). Our previous ests were ($0.05), $0.05 and $0.09 for ODP stand-alone from 2013-15.”
Office Depot closed on Wednesday at $5.38.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in