Citi Initiates Coverage on Office Depot (ODP) with a Hold

May 22, 2008 7:51 AM EDT

Citi initiates coverage on Office Depot (NYSE: ODP) with a Hold. Price target $16.

Citi analyst says, "The office product stocks are most highly correlated to GDP growth, which is not expected to bottom until Q408. Because the stock has pulled back 66% from its pre-recession peak in January 07 as a result of a tough macro environment, we think much of the downside risk is priced in at current levels...What Could Make Us More Positive — To become more positive on the stock, we need to see margins start to stabilize, an improvement in the Florida and California economic environments (which account for 26% of ODP’s North American retail sales and 30% of North American business solution sales) and/or any indication of possible market share gains."

Office Depot, Inc. is a global supplier of office products and services. The Company is organized into three business segments: North American Retail division, North American Business Solutions division and International division.

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