Mixed Signals on Macy's Send Stock Higher

NEW YORK (TheStreet) -- Mixed emotions in the world of Macy's today.

On one hand, the department store was upgraded to buy from hold by Citigroup, which cited increased conviction of top-line and margin potential.

On the other, a report released by Audit Integrity, an independent research firm, last week listed Macy's as one of the companies with the highest probability of declaring bankruptcy.

Citi analyst Deborah Weinswig said the company's localization initiative should continue to gain traction and is encouraged by the consistent, positive results it has reported from its 20 pilot markets since the end of 2008.

Breakout Retail Stock

Macy's also expects the benefit from product cost deflation to be greater in 2010 than in 2009, Weinswig said.

She raised her price target to $30 from $15 and raised full-year outlook to $1.30 a share from a prior forecast of 97 cents. This is significantly above Macy's guidance between 70 cents and 80 cents a share.

In Tuesday's pre-market trading the stock was changing hands at $18.79, up by $1.00 from the Monday close, or more than 5.6%.

-- Reported by Jeanine Poggi in New York

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