Nomura Securities Maintains a 'Neutral' on OfficeMax (OMX); Stock at Fair Value; BKS News Supports Downside

Nomura Securities maintains a 'Neutral' on OfficeMax (NYSE: OMX).

Nomura analyst, Arin Rubinson, said, "On Friday 20 May, Liberty Media made an offer to buy Barnes & Noble (NYSE: BKS) for $17 per share, sending the stock up 30%. That should serve as a stark reminder that even the most bearish must be careful not to overstay their welcome. BKS is not, in our view, a great retail asset. It, like OfficeMax (OMX), faces a grave threat from ecommerce. Still, a clean balance sheet allowed value investors to opt for ‘optionality’ in BKS. OMX’s balance sheet is also clean. That may limit potential downside from here based upon the same ‘optionality’ theme. Our estimates remain starkly below consensus. Our 2012 forecast calls for only $141m in EBITDA and $0.08 in EPS versus consensus at $240m in EBITDA and $0.87 in EPS. The stock however, has found fair value as OMX now trades at only 5x our bearish forecast."

For more ratings news on OfficeMax click here and for the rating history of OfficeMax click here.

Shares of OfficeMax closed at $8.11 yesterday.

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