UPDATE: Citigroup Downgrades Staples to Sell; Q2 Highlights Ongoing Challenges

Citigroup reduced its rating on Staples

from Neutral to Sell and lowered its price target from $15 to $10. Citigroup noted, "Our downgrade is driven by: 1) increased potential for margin pressure from new eCommerce pricing initiatives, 2) a deteriorating European macro environment, and 3) a secularly challenged business with high tech product mix, but lack of Apple products in the US. We believe there is potential for further downward movement for the stock as LT investors are likely to unwind positions and wait for a restructuring plan to materialize." Staples closed at $11.49 on Wednesday.