After a decent run in 2010, shares of Staples (SPLS) were meandering along until they suffered their biggest one-day drop in 11 years last month.
The office supply chain's stock plunged 15% the day it reported first-quarter earnings. The results fell short of expectations amid rising costs and weak demand for office supplies. Staples also slashed its full-year forecast and said it expects "very little improvement" in the economy this year.
While office supply retailers may be challenged by the sluggish economic recovery, analysts also say that they are also fighting to stay relevant in an environment where businesses and shoppers can purchase their office supplies online from retailers like Amazon.com (AMZN).
Still, with the shares trading near their 52-week low and at only 11 times 2011 earnings estimates, most analysts have a buy rating on the stock.
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