Market Overview

UPDATE: Morgan Stanley Initiates Coverage On Staples

Share:
Related SPLS
Despite Management's Best Efforts, Argus Sees Failed Merger, Amazon Pressure Continuing To Squeeze Staples
Watch These 7 Huge Call Purchases In Monday Trade

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
May 2016Bank of AmericaUpgradesNeutralBuy
May 2016CitigroupMaintainsNeutral
May 2016Deutsche BankMaintainsHold

View More Analyst Ratings for SPLS
View the Latest Analyst Ratings

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

 

Related Articles (SPLS)

View Comments and Join the Discussion!