Haverty Furniture Cos. shares rose as much as 5 percent on Monday after Morgan Keegan upgraded the retailer to “market perform” from “underperform,” citing a 12 percent drop in the shares since the end of the third quarter.

In early October, Morgan Keegan analyst Laura Champine had lowered her Haverty rating to “underperform” after the retailer said third-quarter profit margins were trending below second-quarter levels.

Haverty’s shares tumbled further in early November, when the company reported a 10 percent drop in sales at stores open more than a year for October, breaking a string of same-store sales increases for the previous five months. At that time, Haverty also forecast lower fourth-quarter sales amid an industrywide slowdown.

In a research note on Monday, Champine said Haverty’s current price “takes into account the reduced expectations for sales and earnings” heading into the fourth quarter. She also cited a lack of near-term negative catalysts for Haverty in wake of the previously reported weakening sales trends.

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