) to overweight from neutral after Gene Kahn resigns as chairman and CEO.
Analyst Shari Eberts says his upgrade follows news that May Department Stores is seeking a new CEO. She sees a significant earnings per share upside potential which she believes will be quickly reflected in the stock.
She notes that while May Department Stores was historically a leader in its industry, operating performance has severely lagged peers for several years and recent same-store sales have been dismal. She feels a change was needed.
Ebert sees investors looking to potential earnings per share power from a renewed May Department Stores, which would be substantial given its larger sales base now that it has purchased Marshall Field's and May's historically industry leading operating margins.