UPDATE: Jefferies Reiterates Hold Rating, Raises PT on Office Depot as Business Model Changes Will Take Time

In a report published Wednesday, Jefferies analyst Daniel Binder reiterated a Hold rating on

, and raised the price target from $5.25 to $6.50. In the report, Jefferies noted, “Merger synergies are being realized quickly and expectation are in an upward revision cycle, but business model changes will take time to develop/create, test and implement. Synergies buys time and won't be sticky if the business continues to shrink, so finding life beyond office products will be important for ODP. Until there is clarity on that front shares likely get a low valuation, even as profits rise shorter-term.” Office Depot closed on Tuesday at $6.33.