Story updated at 10:05 a.m. to reflect market activity.
Macy's gained 2.4% to $59.51 in morning trading.
The bank raised its price target for the retailer to $68 from $56. Analyst Paul Lejeuz said Macy's is posting strong sales in a challenging retail environment.
"In what was likely one of the most challenging holiday seasons, M performed very well, posting solid comps (+2.3% including licensed departments) and flat merchandise margin in what was a remarkably promotional season. In our view, Q4 proves that they won the battle of the mid-tier department stores, demonstrating the company has the brands consumers want, has leverage with those brands, and is nimble with promotions," the analyst wrote. "This, in addition to the company's steady and strong FCF and SG&A flexibility, prompt our more positive view on the stock."
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Separately, TheStreet Ratings team rates MACY'S INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MACY'S INC (M) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."