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UPDATE: Morgan Stanley Initiates Coverage On Staples

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In a note released Tuesday morning, Morgan Stanley analyst Simeon Gutman initiated coverage on Staples (NASDAQ: SPLS) with an Underweight rating and an $11 price target.

The main tone of Gutman's note seemed to be that it's going to get worse before it gets better. He noted that the omni-channel transitions are turning out to be more costly and last longer than expected, which will put pressure on margins in the near-term.

Although Staples is said to have best-in-class execution and customer satisfaction, Gutman warned that, according to the firm's Alphawise survey, spending for office products over the next 12 months is only expected to rise ~1 percent.

Looking to next year, Gutman is estimating a 2015 EPS of $0.95 and a EBIT margin decline 10 basis point larger than the consensus.

Latest Ratings for SPLS

DateFirmActionFromTo
Feb 2015Goldman SachsUpgradesSellNeutral
Feb 2015Janney CapitalUpgradesNeutralBuy
Feb 2015TelseyUpgradesMarket Perform

View More Analyst Ratings for SPLS
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Simeon GutmanAnalyst Color Price Target Initiation Analyst Ratings

 

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