UPDATE: Wells Fargo Upgrades Macy's, States 'They Won the Battle of the Mid-tier Department Stores'

In a note released Tuesday, Wells Fargo analyst Paul Lejuez upgraded Macy's (NYSE: M) from Market Perform to Outperform and raised the valuation range from $54-58 to $66-70.

Looking at the results from this holiday season, Lejuez sees Macy's +2.3 percent comp store sales as "solid." Lejuez continued, "Q4 proves that they won the battle of the mid-tier department stores, demonstrating the company has the brands consumers want, has leverage with those brands, and is nimble with promotions."

Moving forward, Lejuez highlighted ten factors he likes about Macy's:

1. They won the battle of the mid-tiers
2. They have the best "team" on the field from a brand perspective
3. Brands need them
4. Ability to read and react
5. Ability to cut expenses when they have to
6. They are set up to be promotional
7. The most consistent gross margin in retail
8. Most consistent free cash flows in retail
9. It's inexpensive

10. View Bloomingdales as a valuable asset

    With a look towards the future, Leujuez estimates that over the next five years Macy's will repurchase 43 percent of its market cap and return another 10 percent of market cap through dividends.

    At last check, Macy's was trading up ~1.5 percent at $58.98.