Office supplier Staples, Inc. ( SPLS ) on Thursday saw its price target lowered by analysts at J.P Morgan, who cited economic uncertainty leading to investor skepticism about the shares.
The firm maintained its "Overweight" rating but cut its price target for SPLS from $20 to $19, suggesting a still-massive 33% upside to the stock's Wednesday closing price of $14.29.
A J.P. Morgan analysts noted that "investors are likely to remain apathetic until we get clarity on the economic backdrop domestically and internationally. We received a number of questions on why the stock didn't get a greater 'relief rally' on Wednesday, and we believe this uncertainty, the lack of August commentary, and management not 'lowering the bar' following recent uneven results gave the day to the skeptics. Overall, we believe that patience is required and look for macro cues on when to become more aggressive with the stock."
Staples shares fell 49 cents, or -3.4%, in premarket trading Thursday.
The Bottom Line
Shares of Staples ( SPLS ) have a 2.80% dividend yield, based on last night's closing stock price of $14.29. The stock has technical support in the $12 price area. If the shares can firm up, we see overhead resistance around the $16-$17 price level.
Staples, Inc. ( SPLS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.
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