Office Depot (ODP) Lowered to Sell at Zacks Investment Research

Office Depot (NASDAQ:ODP) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Wednesday.

According to Zacks, “After reporting in-line earnings in the third quarter of 2017, Office Depot delivered positive earnings surprise in the fourth quarter. Top line also came ahead of the Zacks Consensus Estimate for the second quarter in row. But despite reporting better-than-expected results, shares came under pressure and have underperformed the industry in a year. It seems that investors’ apprehension about the stock stems from dwindling top and bottom-line performance. Further, management’s soft earnings projection and bleak adjusted operating income view for 2018 alarmed investors. Management hinted that incremental growth investments to catapult it into a services-driven company and reduced sales volume are the primary reasons behind lower adjusted operating income. Also, estimates have been showing a downtrend. Nevertheless, the company is concentrating on business operating model, growth prospects, cost structure and omni-channel capabilities.”

ODP has been the subject of several other research reports. BidaskClub lowered shares of Office Depot from a “hold” rating to a “sell” rating in a research note on Wednesday, January 31st. ValuEngine lowered shares of Office Depot from a “buy” rating to a “hold” rating in a research note on Sunday, December 31st. Finally, Jefferies Group reaffirmed a “hold” rating on shares of Office Depot in a report on Thursday, March 1st. Three equities research analysts have rated the stock with a sell rating, six have issued a hold rating and one has issued a buy rating to the company’s stock. The stock currently has a consensus rating of “Hold” and an average target price of $5.08.

Shares of Office Depot (NASDAQ:ODP) traded down $0.01 during mid-day trading on Wednesday, hitting $2.45. 1,148,821 shares of the stock traded hands, compared to its average volume of 4,937,174. The company has a debt-to-equity ratio of 0.81, a quick ratio of 0.87 and a current ratio of 1.40. Office Depot has a 12 month low of $2.27 and a 12 month high of $6.26. The stock has a market cap of $1,413.94, a price-to-earnings ratio of 7.21, a P/E/G ratio of 0.48 and a beta of 2.55.

Office Depot (NASDAQ:ODP) last issued its quarterly earnings results on Wednesday, February 28th. The specialty retailer reported $0.08 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.07 by $0.01. Office Depot had a net margin of 1.76% and a return on equity of 11.74%. The company had revenue of $2.58 billion during the quarter, compared to analyst estimates of $2.58 billion. During the same quarter last year, the business posted $0.11 EPS. Office Depot’s quarterly revenue was down 5.3% compared to the same quarter last year. equities research analysts anticipate that Office Depot will post 0.31 earnings per share for the current fiscal year.

A number of institutional investors and hedge funds have recently added to or reduced their stakes in ODP. Itau Unibanco Holding S.A. boosted its holdings in Office Depot by 718.0% in the 4th quarter. Itau Unibanco Holding S.A. now owns 32,362 shares of the specialty retailer’s stock worth $115,000 after buying an additional 28,406 shares during the period. Suntrust Banks Inc. bought a new position in Office Depot in the 4th quarter worth approximately $149,000. Cornerstone Capital Management Holdings LLC. bought a new position in Office Depot in the 4th quarter worth approximately $156,000. State of Tennessee Treasury Department bought a new position in Office Depot in the 4th quarter worth approximately $159,000. Finally, Amundi Pioneer Asset Management Inc. bought a new position in Office Depot in the 4th quarter worth approximately $171,000. 92.92% of the stock is owned by institutional investors.

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About Office Depot

Office Depot, Inc provides a selection of products and services to consumers and businesses of various sizes. The Company’s segments include North American Retail Division and North American Business Solutions Division. The North American Retail Division includes retail stores in the United States, including Puerto Rico and the United States Virgin Islands, which offer office supplies, technology products and solutions, business machines and related supplies, facilities products and office furniture.

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