Citi analysts have chimed into the valuation debate around Officeworks, saying it is worth 8.9-times forecast earnings or close to $1 billion.
As the under review Officeworks prepares to front fund managers on a non-deal roadshow, Citi analysts say the unit should be valued at a premium to its listed peers because of store and online growth potential.
Officeworks peers - including Staples in the United States - trade at 6.7-times earnings before interest, tax and amortisation.
Citi applied a 33 per cent premium for Officeworks, taking the multiple to 8.9-times forecast 2018 financial year EBITDA of $148 million.
Credit Suisse analysts said it could be worth closer to $2 billion.
"Officeworks is a strong business, but is vulnerable with the potential entry of Amazon and subsequent pressure on technology and stationery category profitability," Credit Suisse analysts told clients on Thursday morning.
"Officeworks would likely be a A$2bn sale."
Officeworks posted $62 million in earnings before interest and tax in the six-months ended December 31, which was marginally higher than the $59 million recorded at the same time last year.
Revenue was also up 5.9 per cent to $927 million.
