Jefferies analyst Daniel Binder has doubts that a buyout of Staples could eventually materialize. The office products sector continues to be challenged and Staples is attempting to "shrink its way to better profitability without significant reinvention," Binder tells investors in a research note after the Wall Street Journal reported the company is in early buyout talks. His analysis indicates that EBIT percentage would have to expand 250 basis points to get to an internal rate of return sufficient to justify the $7B valuation mentioned in the article. Binder sees a low probability of a leveraged buyout of Staples occurring. He keeps a Hold rating on the shares with a $9 price target. Citi this morning upgraded Staples to Buy.