Sector Snap: Hardline retail stocks climb
NEW YORK—Shares of retailers Office Depot, OfficeMax and RadioShack advanced Wednesday after a Barclays Capital analyst upgraded the stocks, saying he thinks hardline retailers will do better in 2012.
Analyst Alan Rifkin raised his rating on hardline retailers to "Neutral" from "Negative," and upgraded shares of Office Depot Inc., OfficeMax Inc., and RadioShack Corp. to "Equal Weight" from "Underweight." He said all three companies will face big challenges in 2012, but the stocks are down sharply and the companies have made some adjustments.
Hardline retailers typically carry products other than clothing, including hardware, housewares, automotive, electronics, sporting goods, health and beauty products or toys. Rifkin said sales of office products are stabilizing, and Office Depot and OfficeMax have made changes that will steady their businesses.
He said sales of mobile devices will help RadioShack in the second half of the year even though the consumer electronics market is facing high discounts and competition from online retailers. Rifkin wrote that he still expects other retailers to do better than the office supply and electronics retailers this year.
"We expect fundamental performance within the hardlines space to remain polarized in 2012, as it was in 2011, with the auto parts and home furnishings sectors outperforming the office products and consumer electronics sectors," he said.
Shares of Office Depot, based in Boca Raton, Fla., are down 60.1 percent over the last year, and the stock rose 16 cents, or 7 percent, to $2.45 in afternoon trading. Shares of Naperville, Ill.-based OfficeMax jumped 53 cents, or 11.4 percent, to $5.18 in afternoon trading. The stock is down 74.6 percent since last Jan. 18. RadioShack shares rose 89 cents, or 9.1 percent, to $10.69. The Fort Worth, Texas, company's stock has fallen 42.7 percent over the last year.
