UPDATE: Morgan Stanley Upgrades Staples

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On Thursday, analysts at Morgan Stanley upgraded Staples, Inc. SPLS from Underweight to Equal-weight and raised the price target from $13 to $14.50.

Simeon Gutman finds the activist interest increases the chances of a merger.

"Given these developments and that they stem from an activist investor with a successful track record in this very segment, we view SPLS as now in play; hence, our upgrade to E/W and a new price target of $14.50 (up from $13). The bottom line is that downside seems protected as fundamentals now take a back seat to activist involvement and possible value creation."

Shares of Staples closed Thursday at $16.10, up 8.6 percent.

Posted In: Analyst ColorUpgradesAnalyst RatingsMorgan StanleySimeon Gutman
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