UBS Cuts Estimates for Staples; Benefits of Strategic Plan Still Unclear (SPLS)

Office supply retailer Staples, Inc. (SPLS) on Wednesday caught some lukewarm commentary from analysts at UBS.

The firm lowered its earnings estimates for SPLS through 2014, noting that any real potential benefits related to the company’s strategic plan are still unclear. Yesterday, Staples announced a cost-cutting plan that includes shuttering some 30 stores in the U.S. and 45 locations in Europe.

Additionally, UBS reiterated its “Neutral” rating and $12 price target on SPLS, suggesting zero upside to the stock’s Tuesday closing pric eof $11.80.

Staples shares were mostly flat in premarket trading Wednesday.

The Bottom Line
Shares of Staples (SPLS) have a 3.73% dividend yield, based on last night’s closing stock price of $11.80. The stock has technical support in the $10 price area. If the shares can firm up, we see overhead resistance around the $13-$14 price levels.

Staples, Inc. (SPLS) is not recommended at this time, holding a DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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