Oppenheimer & Co cut its rating on Staples Inc and OfficeMax Inc to perform from outperform, saying sales trends for office supplies retailers appear unlikely to rebound any time soon.
On Wednesday, Staples, the world's largest office supplies retailer reported disappointing earnings and slashed its full year forecast, echoing results posted by smaller rivals Office Depot Inc and OfficeMax, as corporate customers and shoppers spent less on office supplies.
We do not expect shares of even well-positioned office products chains moving substantially higher absent clear evidence of better sales, analysts led by Brian Nagel, who backed their perform rating on Office Depot, said in a note to clients.
We expect still soft white collar jobs growth and ongoing dislocations in the credit markets to weigh upon demand for office products for at least the balance of 2011, the analysts said.
Shares of Staples closed at $16.63 on Wednesday on Nasdaq, while OfficeMax shares closed at $8.26 on the New York Stock Exchange. Office Depot shares closed at $4.16 on the New York Stock Exchange.
(Reporting by Abhishek Takle in Bangalore; Editing by Jarshad Kakkrakandy)