Jefferies Downgrades Office Depot (ODP) and Staples (SPLS) to Hold on Merger Termination

Jefferies downgraded both Office Depot (NASDAQ: ODP) and Staples (NASDAQ: SPLS) from Buy to Hold with a price target of $5.25 and $9, respectively, after the merger of the two companies was terminated.

Analyst Danial Binder commented, "Following the court’s decision to issue a PI to block SPLS acquisition of ODP, we are downgrading both companies to Hold from Buy. Our ratings were previously based on SPLS successfully acquiring ODP and benefitting from over $1 billion in synergies. On a standalone basis, each company’s retail and contract segments are vulnerable to secular decline and increased competition, but remaining synergies at ODP and cost cutting at SPLS should help offset pressures."

For an analyst ratings summary and ratings history on Office Depot click here. For more ratings news on Office Depot click here.

Shares of Office Depot closed at $6.09 yesterday.

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