UPDATE 1-JP Morgan ups Macy's to overweight

Nov 6 (Reuters) - J.P Morgan raised Macy's Inc (M.N) to "overweight" from "neutral," citing improving monthly comparable store sales at the department store operator and a potential for earnings upside.

"We expect a healthy EPS beat in the third quarter ...and see potential upside to fourth-quarter earnings," the brokerage said.

With improving same-store sales trends, higher-margin private label and exclusive products outperforming, and SG&A dollars remaining down year-over-year, Macy's is poised to beat current consensus estimates materially, the brokerage added

The "My Macy's" localization initiative and an improving New York City shopping backdrop would help improve top-line results, the brokerage wrote in a note to clients.

The brokerage also raised its price target on the stock by $4 to $23.

Cincinnati-based Macy's stock was up 3 percent at $18.50 Friday in trading before the bell. It closed at $18.02 Thursday on the New York Stock Exchange. (Reporting by Vidya Lakshmi in Bangalore; Editing by Jarshad Kakkrakandy)