Sprouts Farmers Market closes $600 million revolving credit facility
On Thursday, Citi analyst Paul Lejuez adjusted Macy’s (NYSE:M) price target upward to $12.00, a rise from the previous $11.00, while sustaining a Neutral rating on the company’s shares. Currently trading at a P/E ratio of 6.08 and generating $23.01 billion in revenue, Macy’s appears fairly valued according to InvestingPro analysis. Lejuez noted that Macy’s first quarter results surpassed consensus expectations, with sales trends showing improvement as the quarter went on, and a further uptick in May compared to March and April combined.
The analyst highlighted that management acknowledged during the earnings call that consumer demand has been stronger than consumer sentiment might suggest. Despite the volatile market backdrop, Macy’s management has incorporated the potential for softer consumer spending into its guidance. To date, however, a weakening in consumer spending has not been observed. InvestingPro data reveals 13 additional key insights about Macy’s financial health and future prospects, available exclusively to subscribers.
Macy’s has also planned for the flexibility to reduce prices to capture market share in specific categories where competitors may be facing pressure. This strategic pricing flexibility comes in the wake of a court decision that blocked the Liberation Day tariffs, introducing additional uncertainty into management’s considerations for their business strategies.
Lejuez pointed out that Macy’s stock is not considered expensive based on Citi’s estimates, supported by its strong free cash flow yield of 23% and attractive dividend yield of 6.08%. Given the macroeconomic uncertainty and the ongoing challenges that department stores face, the risk/reward ratio is deemed to be balanced. This assessment reflects a cautious outlook on the stock, acknowledging both the recent positive sales trends and the broader challenges within the retail sector.
In other recent news, Macy’s reported first-quarter 2025 financial results that exceeded Wall Street expectations, with an adjusted earnings per share (EPS) of $0.16, surpassing the forecast of $0.14. Revenue also exceeded projections, reaching $4.6 billion compared to the anticipated $4.4 billion. Despite this positive performance, Macy’s has revised its full-year EPS outlook downward to a range of $1.60 to $2.00, aligning with the Street’s forecast of $1.84. The company anticipates a decline in same-store sales between -0.5% to -2.0%, with a projected gross margin contraction of 30 to 70 basis points due to tariff impacts. Analyst firms have reacted to these developments, with Jefferies lowering Macy’s stock price target to $14.50 but maintaining a Buy rating, while JPMorgan reduced the target to $12.00, holding a Neutral rating. Macy’s management highlighted improvements in product offerings and customer experience, alongside strategic initiatives in store reimagining and brand introductions. Despite these efforts, the company remains cautious about the impact of tariffs and consumer spending trends on future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.