(Recasts; adds details, share movement)
March 10 (Reuters) - Goldman Sachs upgraded the U.S. on-mall sector to “attractive” from “neutral” as it expects department-store chains to stage a recovery, partly helped by interest-rate cuts by the U.S. Federal Reserve and tax rebates from the U.S. Congress’ stimulus package.
Major department store chains, including J.C. Penney Co Inc (JCP.N) and Nordstrom Inc (JWN.N), reported lower same-store sales in February as consumers, fighting a housing market slump and higher fuel and food prices, spent less on home goods and women’s apparel.
Goldman termed department stores’ outlook for 2008 as “achievable,” and expects the companies to benefit from easing revenue comparisons in the second half of fiscal 2008, tighter inventory control and better expense management.
Goldman removed Wal-Mart Stores Inc (WMT.N) from the conviction buy list but maintained its “buy” rating on the stock as it expects the discount retailer’s turnaround plan to yield results in 2008 and fundamentals to be helped by the third-quarter stimulus package.
Wal-Mart shares were trading down 45 cents at $49.45 on the New York Stock Exchange.
J.C. Penney shares fell 47 cents to $40.53, while Macy’s dipped 10 cents to $23.31.
Kohl’s was off 74 cents at $42.09, while Nordstrom’s was up 26 cents at $33.01. (Reporting by Dhanya Skariachan in Bangalore; Editing by Pratish Narayanan)