Morgan Stanley Expects 'Holiday Cheer' From Macy's

Kimberly Greenberger of Morgan Stanley is expecting

to deliver an out-performance fourth quarter due to easy comparisons, compelling strategies and a superior omni-channel network. "We are increasingly convinced that Macy's has the merchandise, infrastructure and strategies in place for 4Q out-performance," Greenberger wrote in a note to clients. According to Greenberger, Macy's is a leader due to three distinct reasons. First, the company has better merchandising offerings that allocates inventory to different channels efficiently allowing merchants to make better decisions. In fact, the company has a "single view of inventory" in five departments which will be expanded to all departments by early in 2015. Second, Macy's offers consumers a better buying experience through the use of tablets in store, digital wallets, mobile and online ordering. Third, Macy's offers a better fulfillment through its Buy-online-pickup-in-store which will be available in all locations. Meanwhile, same-day deliver is being tested in major markets. Bottom line, Macy's is a "secular winner" in omni-channel retailing. As such shares are designated as a "Morgan Stanley Best Idea" with an Overweight rating and $66 price target. Shares of Macy's closed Wednesday at $61.97.