UPDATE: Bank of America Raises PO on Office Depot as Merger Progresses

Bank of America analyst Denishe Chai published a report Thursday on Office Depot ODP and raised the price objective on the stock from $1.65 to $3.50 and maintained an Underperform rating.

In the report, Bank of America commented that, "The process continues for the proposed merger of ODP and OMX, with both companies communicating with and responding to FTC requests. In our opinion, this lends support to the share price and, consequently, we are raising our price objective to $3.50 (0.1x P/S on 2014E) from $1.65 (0.04x P/S on 2013E). We believe 2014 better represents the forward year and a more normalized period. Following a completed SEC review, special shareholder meetings will be set to vote on the deal, with the potential transaction expected to close late 2013."

Office Depot closed at $3.98 on Thursday.