NEW YORK (TheStreet) -- Shares of Macy's (M) - Get Report were advancing in early-afternoon trading on Wednesday after Citigroup upgraded the stock to "buy" from "neutral" given its free cash flow and dividend yield. 

"I like this call," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning. 

He explained that competing retailer PVH (PVH), which owns the Tommy Hilfiger and Calvin Klein brands, recently said that back-to-school sales were strong, which should benefit Macy's as well.

"There is no one who has a better look at Macy's than PVH, and when [PVH CEO] Emanuel Chirico came on 'Mad Money' he said great things, which is the read-through to Macy's," Cramer noted.

Cramer added in the above video that cash flow is good for department stores, Macy's has a 4% yield, the stock is down compared to a year ago and the company's planned "massive restructuring" should be good for gross margins. 

He also pointed out that Macy's planned closure of 100 stores should be a positive catalyst for TJ Maxx parent company TJX Cos. (TJX), as Macy's merchandise typically ends up at the discount retailer's stores. 

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(TJX is a holding of Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Macy's strengths 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

TheStreet Ratings objectively rated this 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 article's author. 

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