Steep cost cuts and merger synergies have helped guide Office Depot (ODP) back to profitability, notes Barron's.
No-nonsense CEO Roland Smith has narrowed the focus of the company. The exec wants Office Depot to pursue the higher margin opportunities presented in business services.
KeyBanc thinks the office supply giant could see EBITDA of $800M per year by 2016 as initiatives play out.
The early innings turnaround has attracted value investors keying in on the potential for ODP shares to more than double.
The wildcard in the mix: The FTC included online competition in a market review related to the merger of Office Depot and OfficeMax. That assessment leaves open the possibility Staples (SPLS) and Office Depot could merge one day without a regulatory roadblock.