November 21, 2007 / 1:01 PM / 11 years ago

UPDATE 1-RESEARCH ALERT-Analysts go neutral on Office Depot

(Changes source, adds details)

Nov 21 (Reuters) - Analysts moved to a neutral view on Office Depot Inc ODP.N, the world’s second-largest office supplies retailer, saying both upside and downside from the current levels were limited.

Bear Stearns lowered its rating on Office Depot to “peer perform” from “outperform,” citing a macro slowdown that hurt the office sector, among other reasons.

The brokerage said that even when capital returns to retail, it might seek out other opportunities before Office Depot.

Jefferies & Co cuts its price target on the stock to $18.50 from $23, and maintained its “hold” rating. Jefferies said Office Depot shares may move sideways as macro headwinds persist.

Credit Suisse, however, upgraded the stock to “neutral” from “underperform,” saying that downside from here was limited.

“At the same time, there is limited upside given the lack of appetite for retail turnaround stories,” Credit Suisse added.

The company had reported a lower-than-expected quarterly profit on Tuesday due to a fall in U.S. same-store sales and margins being hurt by promotions.

Office Depot has seen many of its small business owner customers pull back purchases amid housing market weakness and has a conservative outlook for the holiday season.

Shares of Office Depot closed at $17.49 Tuesday on the Nasdaq. They fell about 7 percent on Tuesday following the results, and have fallen more than 50 percent since the start of the year. (Reporting by Ankur Relia in Bangalore; Editing by Jarshad Kakkrakandy)

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