Ahead Of The Bell: United Stationers Upgraded
NEW YORK (AP) ¿ A possible stabilization in sales, new business from Staples Inc. and aggressive cost cuts mean United Stationers Inc., an office products wholesaler, is well-positioned to see share price gains, said one analyst Tuesday.
Jefferies & Co.'s Daniel Binder upgraded the company to "Buy" from "Hold" and narrowed his 12-month price target to $28 from a range from $28 to $30, noting that the stock is trading cheaply compared to its historical price-to-earnings ratio.
"Shares have been heavily discounted to levels not seen since the last downturn," Binder wrote in a research note to investors.
Banks are starting to be more willing to lend to consumers and businesses, Binder said, and a macroeconomic recovery may be looming, with retail earnings recovering.In United Stationers' case, new business with Staples should alleviate fears that the retailer's takeover of Corporate Express NV would cause it to nix deals with its first-call wholesaler. The company is also controlling inventory well and renegotiating with vendors, helping support profit margins until sales recover, Binder said. At the same time, Binder raised his rating to "Buy" on several other retailers, including Best Buy, Target, Home Depot, Costco and Kohl's. Shares of United Stationers closed 18 cents lower to $21.01 on Monday. In the past 12 months, the stock had traded as high as $53.60 and as low as $18.20.
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