Myer rallies after Morgan Stanley's positive outlook

The news: Myer shares rallied for a second day following its positive trading update on Thursday, as Morgan Stanley described the result as a "modest upside surprise".

Myer shares rose 4.44% to 0.47 cents as of 11:19am AEDT, continuing Thursday's gains of 10%.

The context: Retail group Myer has reported a 3% uptick in sales year on year driven by double-digits sales growth in homewares, women's wear and concessions.

Analysts at Morgan Stanley holds an overweight rating on the stock with a price target of 69 cents. They projected a 13.75x average mid-cycle relative valuation against the ASX 200 after forecasting improved consumer sentiment, higher gross margin expansion and meaningful synergies from its Apparel Brands acquisition by FY28.