Shares of Staples popped more than 2 percent Monday after analysts at Bank of America Merrill Lynch upgraded the stock to "buy" and London's Sunday Times reported contact with buyout firms to shop the retailer's European assets.
Analysts put a $10 price target on the stock, citing potential upside as the company downsizes its retail footprint and looks to exit from its loss-making European business.
"In addition to valuation, we see the potential for earnings upside as SPLS refocuses on its core strengths," the BofA-Merrill Lynch note said. The company is refocusing on strengths after the failed Office Depot merger, the note said, while the stock is at a 17-year low.
Analysts did cite risks of declining demand for paper, ink & toner, and increased competition from Amazon.