UPDATE: ISI Group Downgrades Staples

According to a research report published this morning, ISI Group has downgraded Staples

from Hold to Sell. In the report, ISI Group commented, "We are downgrading Staples to Sell from Hold, as the stock has bounced 8% ytd, yet secular fundamentals have not improved, European headwinds remain, and our surveys suggest bullish sentiment is way above normal on consumer discretionary stocks. Our analysis shows that the 2mn white-collar jobs created since the last recession have failed to kick-start office product sales, suggesting that secular headwinds trump cyclical tailwinds. Staples remains the undisputed leader and winner in its space, but with at least 500 too many stores in the industry, margins appear to have more downside than upside in an mCommerce world." ISI Group maintains its $13 PT on Staples, which is currently trading at $14.91.