7. Office supply retailer Office Depot (ODP), whose shares have lost 33% this year, has struggled to compete with larger rival Staples (SPLS) as corporate clients cut costs. After suffering losses in eight of the past nine quarters, Office Depot swung to a third-quarter profit of $64 million, or 18 cents a share, from a loss of $398 million, or $1.51, a year earlier. However, excluding one-time gains, earning were 3 cents a share. Revenue declined 4.3%. Office Depot has $678 million of cash and $731 million of debt.
Outlook: Although Office Depot has stabilized, analysts are pessimistic about the stock's near-term performance. Of those evaluating the company, three rate its stock "buy", 13 rate it "hold" and three rate it "sell." A median target of $5.75 suggests the stock could rise 32% during the next 12 months. Sanford Bernstein is bullish, predicting that the stock will nearly double. Barclays (BCS) and Goldman Sachs expects the shares to hit $5. Another reason for investors to pause: Office Depot stock is trading at 63 times its 12-month earnings projections, making it expensive.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV