Finny logo
Finny logo
Dibs:
Dibs:
0

7-day free trial: Get unlimited comparisons, and stock, ETF and mutual fund analyses for just $14.95 a month, without ads. Start a free trial. Go ad free!

Macy's Inc (M) Stock Guide

September 18, 2020
56
Bull Case
  • Company’s profitability is improving
  • Forward P/S ratio low relative to industry peers
  • Forward PEG ratio low relative to industry peers
  • Cash/Debt ratio is higher than the industry and sector averages
  • Enterprise Value/Revenue ratio high relative to industry peers
Bear Case
  • Revenue growth lower than the industry and sector averages
  • Average analyst stock price below current stock price
  • High short share of float
  • High short interest

Before we start: if you're looking for M stock price, you can quickly find it out by visiting Finny and typing "M quote". If you're looking for a quick scoop on M stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "M". You'll get all this info in one place. Or you can just type "M news" to get the latest stock news.

Looking to buy or sell Macy's Inc (M)? Interested in getting the full scoop on M, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this M stock guide, we'll address key questions about M, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are M earnings?
2. What is M stock forecast (i.e., prediction)?
3. M buy or sell? What is M Finny Score?
4. What are the reasons to buy M? Why should I buy M stock?
5. What are the reasons to sell M? Why should I sell M stock?
6. What are M key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are M earnings?

M trailing 12-month earnings per share (EPS) is -$10.17.

Analyst Predictions

2. What is M stock forecast (i.e., prediction)?

Based on M analyst price targets, M stock forecast is $6.62 (for a year from now). That means the average analyst price target for M stock is $6.62. The prediction is based on 22 analyst estimates.

The low price target for M is $3.00, while the high price target is $15.00.

M analyst rating is Hold.

Analysis

3. M buy or sell? What is M Finny Score?

Our quantitative analysis shows 5 reasons to buy and 4 reasons to sell M, resulting in Finny Score of 56.

4. What are the reasons to buy M? Why should I buy M stock?

Here are the reasons to buy M stock:

  • Macy’s likely has significant bargaining power with vendors, given its large scale and national presence.
  • Macy’s has a private-label business and exclusive products, which provides a point of differentiation from other department stores and possible pricing power.
  • Owned real estate provides the possibility for upside if its value is unlocked. We expect over $400 million in asset sale gains in 2017.
  • We believe Macy’s sustained focus on price optimization, inventory management, merchandise planning, and private label offering are the primary catalysts, facilitating in meeting customer-oriented demand and improving in-store shopping experience. In an attempt to increase sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing e-commerce business and online order fulfillment centers. Going forward, management remained optimistic of capturing sales opportunities with its fresh inventory along with My Macy's localization initiatives, omnichannel integration and Magic Selling.
  • Macy's had earlier announced slew of measures revolving around store closures, cost containment, real estate strategy and investment in omnichannel capabilities. The company has closed 81 Macy’s stores, as a part of its planned closure of about 100 stores announced in August 2016, and plans to shutter about 19 more stores. The company also sold its premium chocolate brand, Frango to Garrett Brands. Further, it will realign operations and focus on curtailing costs.
  • Macy’s posted the third straight quarter of positive earnings surprise, when it reported fourth-quarter fiscal 2017 results. Its adjusted earnings came in at $2.82 per share beating the consensus estimate of $2.69.
  • The company has been widening its operations via deals and collaborations to increase its customer base. The company had entered into an agreement with Best Buy, whereby the latter is operating stores within its department stores. Macy’s had earlier announced that it has entered into a joint venture with Fung Retailing Limited – one of the leading retailers in Greater China – in an attempt to tap retailing opportunities in the fast-growing Chinese markets. Macy's holds a 65% stake in the joint venture, which is called Macy’s China Limited.
  • In fourth-quarter fiscal 2017, comparable sales increased after witnessing decline in the past few quarters. Comps on an owned plus licensed basis were up 1.4% while the same rose 1.3% on an owned basis. Further, management hinted that strategic investments across stores, technology and merchandising are likely to aid in comparable sales growth in fiscal 2018.
  • M profitability is improving. The YoY profit margin change was 3.83 percentage points. See M profitability chart.
  • M Price/Sales ratio is 0.10, which is low compared to its industry peers’ P/S ratios. See M forward Price/Sales ratio chart.
  • M PEG ratio (P/E adjusted for growth) is 0.09, which is low compared to its industry peers’ PEG ratios. See M PEG chart.
  • M cash to debt ratio is 0.18, higher than the average industry (0.07) and sector (0.13) cash to debt ratio. See M cash to debt chart.
  • M Enterprise Value/Revenue multiple is 0.40, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See M Enterprise Value/Revenue chart.

5. What are the reasons to sell M? Why should I sell M stock?

Let's look at the reasons to sell M stock (i.e., the bear case):

  • Macy's will have to deliver accelerated growth to drive returns, which we view as a difficult undertaking. Announced cost cuts could lead to underinvestment in stores and customer service.
  • The department store space is still losing market share, especially to off-price, and is highly exposed to e-commerce threats, given the nonexclusivity of many products.
  • If competitors such as J.C. Penney and Kohl’s can put troubles behind them and continue enhancing the quality of their merchandise offerings, they could increase the competitive pressure on Macy’s top-line growth.
  • Macy’s top line increased 1.8% year over year in fourth-quarter fiscal 2017, after witnessing a decline in the past eleven quarters. However, the metric came in below the consensus mark. The company generated net sales of $8,666 million that missed the consensus estimate of $8,724 million.
  • Macy’s operates in the highly competitive retail merchandise sector. The company faces stiff competition from a diverse group of competitors, such as Wal-Mart, Target, Bed Bath & Beyond, general merchandise stores, specialty stores and discount stores, which are likely continue to weigh on its results. We also remain concerned about Macy’s low pricing power as against other discount chains, which may in turn hurt the company’s market share.
  • The company’s customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their discretionary spending, and in turn the company’s growth and profitability.
  • M quarterly revenue growth was -44.50%, lower than the industry and sector average revenue growth (0.38% and 0.78%, respectively). See M revenue growth chart.
  • M average analyst price target ($6.62) is below its current price ($6.86). See M price target chart.
  • M short share of float is 46.92%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See M short share of float chart.
  • M short interest (days to cover the shorts) ratio is 5.1. The stock garners more short interest than the average industry, sector or S&P 500 stock. See M short interest ratio chart.

Key Stats

6. What are M key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for M:

Metrics M
Price $7.22
Average Price Target / Upside $6.62 / -8.31%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Department Stores
Sector Consumer Cyclical
Number of Employees 130,000
Market Cap $1.9B
Forward P/E Ratio 9.27
Price/Book Ratio 0.09
Revenue (TTM) $20.81B
YoY Quarterly Revenue Growth -34.90%
Profit Margin -17.64%

If you liked this analysis, check out Stock Guides for other stocks.

Follow Us