Days after Targetannounced a new partnership with high-end department store Neiman Marcus, the company hit a fresh 52-week high on Friday. Still, one analyst thinks it has more room to run.
“The merchandise in my opinion looks better than it’s looked in the entire time I’ve covered Target , which is more than 10 years,” Patrick McKeever, a senior analyst at MKM Partners, told CNBC’s “Squawk on the Street.”
Target and Neiman Marcus will launch a joint collection during the holiday season that features more than 50 exclusive products that will be sold at both companies.
The partnership follows the May debut of its program, The Shops at Target, which included limited-time collections from several boutiques. A second installation of the program will return this fall.
McKeever has a $69 price target on the company’s stock and called it undervalued at its current price.
“I think there’s room to run here still for Target, and I think it’s going to get a little more attention as we move forward here into the back half of the year,” he said.
While J.C. Penney’s recent turmoil — a credit rating downgrade and a 20 percent drop in revenue in the first quarter — has boosted Target’s market share slightly, McKeever said there is not a great deal of merchandise overlap between the two companies in the apparel area.
“I think the bigger benefit to what’s going on with Penney’s right now is flowing to Macy’s, maybe even a little bit to Sears, and I think there will be more that goes to Kohl’s as we move into the back half of the year,” he said.
Target was not the only lower-priced retailer to hit a new 52-week high on Friday. Although Wal-Mart Stores jumped to new levels today, McKeever was not as bullish on the stock.
“I’m not recommending Wal-Mart,” he said. “I know the stock’s done very well. My preference continues to be Target in mass merchandise retailers.”
—By CNBC.com’s Katie Little
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Patrick McKeever does not own stock in the companies mentioned in this article.
Follow Katie Little on Twitter @katie_little.