OfficeMax shares climb after analyst upgrades

Gary Balter raised the stock to "Outperform" from "Neutral" in a client note Thursday. He left his $15 price target unchanged, implying an expected gain of 27 percent over Wednesday's close of $11.85.

Balter said analysts have overstated the danger to OfficeMax's balance sheet, saying the balance sheet is "quite clean and cash flow positive."

The reason is that many analysts have misinterpreted a form of liability called timber notes, which Balter said result from the company's decision to defer the gain on a sale of timber assets in 2004 through a securitized structure.

These notes actually result in a cash flow that offsets their liability, meaning that they should be discounted in determining the company's value, Balter said.

He added that shares of the Naperville, Ill., company now have limited downside.

"OfficeMax shares are likely to weaken a lot more, but we would not expect a disaster like at Office Depot Inc.," he wrote.

Shares of Office Depot have fallen sharply in recent sessions after that company said earlier this week that the slowing economy was hurting its same-store sales.

An OfficeMax representative could not immediately be reached for comment on Thursday.

Shares of OfficeMax lost 1 cent to close at $11.84. Shares have declined nearly 70 percent from a 52-week high of $39.40 last July.