CS First Boston Raises OfficeMax Rating
OfficeMax (OMX ; $29.43) shares rose Wednesday after CS First Boston upgraded its recommendation on the company to outperform from neutral.
Analyst Gary Balter, who recently met with Sam Duncan, OfficeMax's new chairman and CEO, said he has higher confidence that the company's new management will fix easy execution issues -- or else it will be broken up. Balter noted that moves to consolidate headquarters, close underperforming stores, and fix the supply chain at OfficeMax should at least position the company to reverse some of its recent margin deterioration.
Balter sees 49 cents in earnings per share for OfficeMax during 2005, and raised his earnings per share estimate for 2006 to $1.54 from $1.10. Balter's 12-month price target for the stock is $34 per share.