Story updated at 10:10 a.m. to reflect market activity.
Shares of Office Depot were falling 0.6% to $6.30 in morning trading.
The analyst firm also raised its price targets for the office supply retailer through 2015. Keybanc analysts expect Office Depot to report earnings of 17 cents a share for full year 2014, up from previous estimates of 15 cents a share. The firm raised its EPS estimates for 2015 to 42 cents a share from 33 cents a share.
"On Tuesday, ODP reported strong 3Q operating income and raised 2014 guidance," analysts Bradley B. Thomas and Jason Campbell wrote. "More importantly, the Company provided initial 2015 guidance that was meaningfully above consensus, supported by a confident outlook for synergies and execution in the core business."
Separately, TheStreet Ratings team rates OFFICE DEPOT INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OFFICE DEPOT INC (ODP) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, 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 deteriorating net income, weak operating cash flow and poor profit margins."
You can view the full analysis from the report here: ODP Ratings Report