Bank Of America Sees Potential Upside To Synergies And BSD For Office Depot Inc

In a report published Monday, Bank of America analyst Denise Chai reiterated a Buy rating and $7.00 price target on Office Depot Inc ODP. In the report, Bank of America noted, “We hosted meetings with Office Depot's CFO, Steve Hare, and Mike Steele, IR, in Philadelphia. Our key takeaway was that in the short 10 months since ODP and OMX merged, not only are realized cost synergies running ahead of schedule, but we see upside over time to the 400 store closure target. Just 13 months into the merger, ODP expects to achieve a run-rate that is two-thirds of the $600mn in annualized synergies (by 2016) excluding real estate. Moreover, given its solid performance so far, we also believe that NA Business Solutions could begin to generate positive revenue growth, which could provide a material boost to sentiment and earnings.” Office Depot closed on Friday at $5.71.