Shares of HP Inc.  (HPQ) - Get HP Inc. (HPQ) Report  were rising 0.8% to $19.67 Monday after analysts at RBC Capital upgraded the stock to outperform from in-line while also raising their price target to a Wall Street high of $24 a share from $19.

The firm is bullish on the company as it believes that a potential merger with Xerox (XRX) - Get Xerox Holdings Corporation (XRX) Report , as has been rumored over the past week, creates pressure on the management to maximize value for shareholders. 

Analyst Amit Daryanani wrote that the status quo at the company "is likely unsustainable." The firm sees three different outcomes for HPQ:

TheStreet Recommends

  • Go forward with no merger with a potential upside of $27 per share
  • A "massive" share buyback program totaling between $9 billion and $10 billion
  • Engage with Xerox and have an upside of $24+

Bloomberg reported Monday that Xerox was prepared to offer HP four weeks for both sides to examine one another's books. Reports are that photocopier maker Xerox is looking to pay about $22 a share in cash and stock for the much larger HP Inc. 

Last week, Xerox shot past five-year highs amid reports that it was making a $32.6 billion bid for HP. 

"We have had conversations with Xerox from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction. Most recently, we received a proposal transmitted (Thursday)," HP said. "We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders."