) to neutral from buy.
Analyst Aram Rubinson says Office Depot has a lot of balls in the air. He says the office-supplies retailer is trying to stem market share losses at its North American retail stores, catch up to Staples' performance in contract business, fix the Viking Office Products brand, and integrate the recent acquisition of Guilbert in Europe.
He thinks that's a lot to ask a management team that's already experiencing a high degree of change; on Monday Office Depot announced several changes in the team's organizational structure, including a new position titled president, North America.
Rubinson notes with accelerated capital expenditures coming in 2004, cash flow may not be enough to drive the stock higher. His concerns on the earnings front also linger. Rubinson lowered the $1.02 2003 earnings per share estimate to $1.00. He cut the $19 target to $15.50.