NEW YORK (TheStreet) -- Shares of Staples (SPLS)  are up 0.09% to $16.06 in late morning trading on Monday after Jefferies increase in its price target to $16 from $12.75, while maintaining its "hold" rating. 

"Both the public website and commercial delivery business showed good growth and cost savings were realized, but flow through to profit did not materialize as incentive comp and investment spend kept expenses elevated," Jefferies analysts said. 

Staples is working on a merger with Office Depot (ODP) - Get Report, but in a statement said it may be more difficult than expected.  

Over $1 billion in net synergies is expected, Staples' CEO Ron Sargent noted.

"There is a clear contrast to be made between the CEO of Staples and the CEO of Office Depot," analysts said, adding that Office Depot's CEO is letting all the synergies drop to the bottom line and reinvesting very little, while Staples' CEO sees a need to reinvest some portion of the synergies, particularly into price.  

Potential risks for Staples includes the industry shrinking in demand due to the digitization of home and work offices, increased competition from online and bricks and mortar retailers, and softer demand for technology hardware. 

Seperately, TheStreet Ratings team rates STAPLES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate STAPLES INC (SPLS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 60.3% when compared to the same quarter one year prior, rising from $135.23 million to $216.79 million.
• Net operating cash flow has increased to $604.60 million or 14.60% when compared to the same quarter last year. In addition, STAPLES INC has also modestly surpassed the industry average cash flow growth rate of 9.17%.
• SPLS's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
• Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

• You can view the full analysis from the report here: SPLS Ratings Report