Office Depot (ODP) Stock Lower, Might Sell European Operations
NEW YORK (TheStreet) -- Office Depot (ODP) - Get Report stock is down 3.15% to $3.38 on heavy trading volume late Tuesday afternoon as it considers selling certain European operations after its proposed merger with rival Staples (SPLS) was terminated on antitrust concerns.
Earlier this year, Staples agreed to sell Office Depot's contract distribution and its retail, online and catalog operations in Europe, as well as all Swedish operations to win regulatory approval for the merger, Reuters reports. Office Depot had already finished a restructuring of its European operations last year.
The company anticipates that disruption from the blocked merger will continue into the current quarter.
Office Depot also is working with Bain to conduct a strategic review of its business, as it considers how to structure its capital and provide a return to shareholders, according to a statement.
About 32.88 million shares of Office Depot have been traded so far today, well above the company's average trading volume of roughly 17.85 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C-.
Office Depot's strengths such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow.
You can view the full analysis from the report here: ODP
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles author.
