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The ODP Corporation (ODP) – A Shareholder Letter

Business
0 min read

Friday, December 22, 2023

Office Depot, Inc., together with its subsidiaries, supplies a range of office products and services. It offers merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture through its chain of office supply stores under the Office Depot, Foray, Ativa, Break Escapes, Worklife, and Christopher Lowell brand names. The company also provides graphic design, printing, reproduction, mailing, shipping, and other services through design, print, and ship centers. It has operations throughout North America, Europe, Asia, and Central America. The company also sells its products and services through direct mail catalogs, contract sales force, Internet sites, and retail stores, through a mix of company-owned operations, joint ventures, licensing and franchise agreements, alliances, and other arrangements. As of December 31, 2008, Office Depot operated 1,267 North American retail division office supply stores and 162 international division retail stores, as well as participated under licensing and merchandise arrangements in 98 stores. The company was founded in 1986 and is based in Boca Raton, Florida.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Letter. This week, self described long-term ODP shareholder, AREX Capital Management issued an open letter to the Company’s Board of Directors seeking a relaunch of the Office Deport separation process and the sale of Varis to unlock significant shareholder value.

Value. In AREX’s belief, the market will have a dramatically more favorable view of the remaining ODP business (Business Solutions and Veyer) once the Company no longer operates a primarily brick-and-mortar retailer. In this scenario, using 2024 EBITDA AREX estimates ODP shares could be valued in the $75 range, or nearly 50% above current levels.

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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

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