Deutsche Bank Has Buy on Macy's After Earnings

Deutsche Bank is out with a research report on Macy's

and it has a Buy rating and a $35 price target on shares. In a note to clients, Deutsche Bank writes, "We've seen this movie before by Macy's and its one of the several reasons we like the stock. Simply put, under-promise/over-deliver. Two points: First, 3Q EPS was stronger than expected due to better credit trends (not 1x related) with EPS 2x our est. of $0.16. Second, 4Q EPS guidance of $1.52-$1.57 implies an EBIT flow through of 9.1% (vs. trailing 7 qtr. avg. of 41.2%) on 5.5% SG&A growth, which looks conservative. We think taking a conservative approach is intelligent here, but ultimately we think EPS could exceed $1.65. Raising EPS and PT to $35." Shares of M are off $1.64 to $30.52, a loss of 5.1%.