Optimism over the successful sale by

Sears

(S) - Get Report

of its credit-card unit to

Citigroup

(C) - Get Report

spilled over to

Circuit City

(CC) - Get Report

Wednesday after an analyst said it could pull off something similar.

UBS analyst Gary Balter upped his rating on the stock to buy from neutral, and his target price to $12 from $8, on the potential value the retailer stands to receive for its credit-card business, which has $3.1 billion in receivables.

Shares of the company rose 25 cents, or 2.7%, to $9.43.

"A contract between Circuit City and a potential acquirer of its credit-card operations could add meaningfully to its earnings," Balter wrote.

Following the announcement that Citigroup agreed to pay a 10% premium for the Sears unit, Balter said Circuit City could get as much as $5 per share for its unit, also a 10% premium.

He also cited Mexican entrepreneur Carlos Slim's recent bid to purchase Circuit City for $8 per share as another reason for support in the stock. Slim also indicated he could raise the offer after the company's board rejected the initial bid.

But not all who cover the company agree. Goldman Sachs analyst Deron Kennedy said in a note that Circuit City's credit-card unit still faces considerable pressure from customer defaults and its portfolio is not expected to grow in the near-term.