UPDATE: UBS Upgrades Office Depot (ODP) to Neutral
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UBS analyst Michael Lasser upgraded Office Depot (NASDAQ: ODP) from Sell to Neutral with a price target of $43.00 (from $23.00).
The analyst comments "We believe there are a wide range of outcomes for ODP, but the upside is balanced with the downside. On the positive, the stock can be driven by a recovery in B2B demand for office supplies (its BSD division was down -11.3% in FY'20), the strategic actions it can take to improve the business' positioning, return of capital, and any partnership developments with Staples. On the other hand, the risks are real and include permanent shifts away from working in office settings, sluggish economic conditions, and distractions from news about a tie-up with Staples. Still, we think there's a good chance that ODP can generate EPS of $3.90 in 2022 (it earned $4+ in 2019). In that case, assuming it trades at an ~11x PE, we believe the stock will likely trade in the low to mid $40s."
Shares of Office Depot closed at $41.40 yesterday.
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