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In a report published Monday, Goldman Sachs upgraded its rating on Staples
SPLS from Sell to Neutral.
Goldman Sachs noted, “We would expect the stock's multiple to remain above recent troughs if sentiment remains elevated among investors for potential consolidation. While we do not take a view on the likelihood of a deal, we would expect modest tangible benefits to SPLS earnings from store closings if ODP/OMX were to merge, as well as potential benefits from competitive business disruption. In addition, we expect John Wilson, who now heads Europe, to address challenges in that tough market analytically and aggressively. Potential for action on consolidation and Europe suggests movement on two of the four significant risk factors we had cited for our Sell rating (the other two were getting access to AAPL product, which has not happened, and taking more aggressive action on capital allocation).”
Staples closed on Friday at $12.97.
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