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Macy’s

has been one of many best-performing division retailer shares, rising greater than 48% because the begin of the 12 months. The firm’s fiscal first-quarter report, due out in May, may prolong that rally, Jefferies famous Thursday.

Shares of Macy’s (ticker: M) had been up 2% to $17 in morning buying and selling. The inventory has soared greater than 240% prior to now 12 onths.

Analyst Stephanie Wissink reiterated a Buy score and $20 worth goal, stating that the corporate has offered commentary about robust first-quarter gross sales fueled by stimulus checks, new prospects, and returning members of its Star Rewards program.

Although different retailers are additionally enjoying these tailwinds, Wissink thinks Macy’s appears significantly properly positioned to benefit from a coming cycle of individuals as soon as once more attending dressier occasions and updating their denim wardrobes. The firm’s denim is up 40% from the primary quarter of 2019, she writes, and shifting silhouettes “could lead to a full wardrobe refresh and a multi-year driver for fashion retailers.”

That perception leads Wissink to lift her first-quarter comparable gross sales forecast to 50% from 41%, forward of the 43% consensus estimate. She expects Macy’s to lose 40 cents a share, down from the 49 cents she beforehand anticipated and the common analyst estimate for 47 cents.

Traditionally, fall is extra vital than spring for trend, however given proof of a ramping restoration, Wissink thinks that Macy’s could also be extra assured in shopping for stock for the second half of the 12 months. Also, Chief Merchandising Officer Nata Dvir, who was appointed in the beginning of the 12 months, ought to have the ability to make her mark by that key interval, the analyst wrote. “Her background in beauty with a digital-first approach and developing a roster of indie brands points to a more brand-diversified approach.”

Those elements are key in profitable over youthful, extra fashion-forward customers, who would be the most prepared to spend on recent objects as types change.

Other analysts have additionally been bullish on the stock’s ongoing rally, and insiders have been buying up shares. That comes amid a shift in investor sentiment on department shops. While the pandemic was a brutal blow after years of shrinking market share, those who survived now look better positioned to compete within the new retail panorama.

Write to Teresa Rivas at teresa.rivas@barrons.com