NEW YORK (TheStreet) --Shares of Macy's (M) - Get Macy's Inc Report were higher in early afternoon trading on Monday, after an upgrade to "buy" from "hold" at Deutsche Bank. The firm also increased its price target on the stock to $45 from $40.
Lebenthal Asset Management CEO Jim Lebenthal and Najarian Family and Advisors Office co-founder Pete Najarian discussed the upgrade today during CNBC's "Fast Money Halftime Report."
"Everybody hates brick and mortar retail, right? The thing that you need in brick and mortar retail is you need M&A activity and who's going to be the acquirer? It's going to be Macy's," Lebenthal explained.
Macy's has made some margin headwinds through closing stores. Now "they need to acquire somebody, and shut even more stores down," Lebenthal continued.
"They're focusing on the home, they're focusing on digital, they're focusing on all of the things they need to be focusing on," Najarian said.
Macy's can continue to reduce its margins by scaling back on a number of promotions, because of the amount of store closure.
"I do like that stock," Najarian noted.
Separately, TheStreet Ratings objectively rated Macy's stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: M