This is Why Office Depot, Inc. Stock Plummeted Today

Office Depot, Inc.

Office Depot, Inc. (NASDAQ:$ODP) shares plummeted today after the struggling office supply retailer was heavily downgraded by J.P.Morgan (NYSE:$JPM). The number? A cool 13.3%.

Specifically, analyst Chris Horvers lowered his rating on Office Depot to underweight from neutral, explaining that the office supply category is shrinking and that the company is losing business-to-business market share as it faces increasing competition from Staples and Amazon.com.

Yet, Office Depot’s alleviation efforts of such headwinds have proved to be weak. Three years ago, the retailer merged with Office Max and in 2-15, sought a merger with Staples (NASDAQ:$SPLS). Instead, Staples agreed to sell itself to private equity firm Sycamore Partners, evidence that it also faced a bleak future as a public company.

Office Depot approached a 52-week low following today’s downgrade. Despite its troubles, the office supply retailer is still profitable, and the Compucom deal has the potential to shore up its business. The retailer’s shares are also cheap at a P/E of just 7, but the challenges it faces justify such a valuation.

The next date for investors to watch is Thursday, November 9, when the retailer reports third-quarter earnings before the market opens.

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About the author: Jennifer is a University of Western Ontario graduate with a degree in International Business. She strives to excel as a content creator in the digital sphere, working with clients in the Finance and Tech industry to leverage clickable taglines, images, and articles in driving traffic. When not writing, Jennifer enjoys photography, copywriting, and video production.