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.
Meanwhile, the office suppliers retailer has contacted a handful of buyout firms to shop its European assets, according to London's Sunday Times.
The stock is down more than 18 percent since Staples and Office Depot called off their planned merger earlier this month. A U.S. judge sided with the Federal Trade Commission on anti-trust complaints that the combination would raise prices for consumers and reduce competition.
Shares of Staples are down nearly 13 percent year to date, and 50 percent year over year. The stock traded at $8.28 Monday, down from their 52-week high of $16.74.