Office supply retailer Staples, Inc. ( SPLS ) on Thursday caught some continued bearish commentary from analysts at Goldman Sachs, following Wednesday's awful second quarter earnings report .
The firm reiterated its "Sell" rating on SPLS and slashed its price target from $14 to $11. That new target suggests a small downside to the stock's Wednesday closing price of $11.49.
A Goldman analyst commented, "We lower our SPLS estimates to reflect softer revenue across all three divisions, and lower profitability. We take our gross margin forecasts down on preemptive pricing measures. Our EPS estimates change as follows: 2012 EPS goes to $1.40 from $1.49, 2013 goes to $1.45 from $1.55, and 2014 goes to $1.52 from $1.63. We model EBIT down consistently, with buybacks serving as an offset."
Staples shares fell 13 cents, or -1.1%, in premarket trading Thursday.
The Bottom Line
Shares of Staples ( SPLS ) have a 3.83% dividend yield, based on last night's closing stock price of $11.49. The stock has technical support in the $10 price area. If the shares can firm up, we see overhead resistance around the $13.50-$14.00 price levels.
Staples, Inc. ( SPLS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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