Goldman Sachs maintained a Buy rating on Macy's (NYSE: M) with a price target of $65. Comments follow Q1 results. Despite a tough comp, analyst Stephen Grambling said he would be a buyer ahead of acceleration in H2.

"Macy’s (M) reported adjusted 1Q14 EPS of $0.60 in line with GS/consensus. While the 1.6% decrease in comparable store sales missed expectations, profitability was much better than expected, driven by a combination of gross margin expansion (+14 bps vs. our -15bps estimate) and SG&A cuts (-2% yoy vs. our 0.7% estimate). As a result, EBIT was largely in line. Below the EBIT line, a lower tax rate offset a slightly higher share count relative to our expectations. Importantly, management reiterated both FY14 EPS guidance of $4.40-$4.50 and FY14 comp guidance of 2.5%-3.0%," said Grambling.

"While we were disappointed by the 1Q comps, the forward trajectory and better profitability is encouraging. Additionally, the stock trades at 12X our NTM EPS and a 9%+ free cash flow yield, we would remain Buyers ahead of a second half acceleration," he added.

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Shares of Macy's closed at $57.84 yesterday.