Nomura Securities on U.S. Office Products Retailers by Aram Rubinson
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Price: $10.25 --0%
Rating Summary:
3 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
Rating Summary:
3 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Nomura Securities on U.S. Office Products Retailers by Aram Rubinson
Rubinson said, "The Office Superstore sector has reached a critical juncture as poor results have added credence to the notion that the sector faces daunting secular issues. We do not believe that challenges will dissipate and we do not think consolidation will fix the root issue of relevance. As we note in prior reports, the best way to fix oversized stores is to fill them up with products people want to buy: shrinking – via downsizing footprints or via consolidation – is more of a hope than a strategy. We think innovation and ecommerce need to be addressed before consolidation can become a panacea. The only sensible consolidation would be SPLS+OMX, but we ascribe very low likelihood to that scenario. Staples’ board knows doubling down on retail assets is a bad idea. Meanwhile, the FTC is likely to have serious concerns (as it reportedly did with SPLS+Corporate Express). Maintain Reduce ratings on Staples (Nasdaq: SPLS) (lower target to $14) and Office Depot (NYSE: ODP) (lower target to $2). Maintain Neutral on OfficeMax (NYSE: OMX)."
Rubinson said, "The Office Superstore sector has reached a critical juncture as poor results have added credence to the notion that the sector faces daunting secular issues. We do not believe that challenges will dissipate and we do not think consolidation will fix the root issue of relevance. As we note in prior reports, the best way to fix oversized stores is to fill them up with products people want to buy: shrinking – via downsizing footprints or via consolidation – is more of a hope than a strategy. We think innovation and ecommerce need to be addressed before consolidation can become a panacea. The only sensible consolidation would be SPLS+OMX, but we ascribe very low likelihood to that scenario. Staples’ board knows doubling down on retail assets is a bad idea. Meanwhile, the FTC is likely to have serious concerns (as it reportedly did with SPLS+Corporate Express). Maintain Reduce ratings on Staples (Nasdaq: SPLS) (lower target to $14) and Office Depot (NYSE: ODP) (lower target to $2). Maintain Neutral on OfficeMax (NYSE: OMX)."
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