Another Wall Street firm climbed aboard Ed Lampert's bandwagon at

Sears

(SHLD)

.

Deutsche Bank initiated the retailer with a buy Friday and set a price target of $185, more than 20% above last night's close of $149.87. In premarket trading Friday, the stock was up 2.4% to $153.50, about $5 below its 52-week high touched June 9. The 52-week low of $61.76 came before the merger with Lampert's Kmart.

Deutsche reiterated the now-customary value theory on Sears, saying Lampert can unlock value in its real estate holdings while keeping a firm lid on costs. The brokerage expects Lampert to follow the same blueprint he executed at

AutoZone

(AZO) - Get Report

, foregoing traditional retail metrics like same-store sales in the name of driving profitability.

The brokerage said there are $1.2 billion of potential profit synergies in Sears over the next three years that could add as much as $4.76 to 2007's per-share earnings.

"As with AutoZone and through the first full year of Mr. Lampert running Kmart, we believe Sears Holdings shares should trade on strong cash flow and share repurchase potential," DB wrote. "This can be realized by decreased promotional activity for full prices sales on lower inventory, allowing gross margin to expand."

"Advertising and other expenses (in-store and corporate) can be cut to leverage selling, general and administrative

costs," DB wrote. "Operating margin and earnings before interest grow, driving stronger free cash flow generation. This can be returned to shareholders through repurchases, driving EPS and the share price."

Deutsche Bank is a market-maker for Sears shares.