JP Morgan ups May Department Stores (MAY) 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.