Macy's Upgraded on Improving Sales

(Updated with stock price.)

NEW YORK (TheStreet) -- Macy's(M Quote) was upgraded on Friday to overweight after the department store reported two straight months of improving sales.

The news sent shares of the department store climbing 5.9% to $19.08 in afternoon trading.

J.P. Morgan analyst Charles Grom said the stock has significant upside potential, especially in the fourth quarter, which includes the holiday season.

Other analysts agree. Citi's Deborah Weinswig picked Macy's as one of its top stock for the holiday season.

Both say the department store will benefit from its My Macy's localization initiative, which rolled out nationally in the spring.

Grom raised his third-quarter outlook to a profit of 1 cent a share, from a prior forecast of a loss of 5 cents. He also upped his fourth-quarter guidance to $1.41 a share from $1.32 a share.

The department store is slated to report its quarterly results on Nov. 11.

-- Reported by Jeanine Poggi in New York

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