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On Thursday, Jefferies analyst Ashley Helgans adjusted the price target for Macy’s (NYSE:M) shares, bringing it down to $14.50 from the previous $17.00, while reaffirming a Buy rating on the stock. The revision follows Macy’s first-quarter performance, which surpassed expectations, and an observed improvement in May’s quarter-to-date trends. The company, currently valued at $3.26 billion, maintains a solid financial position with a current ratio of 1.43, indicating strong liquidity.[Discover more insights about Macy’s with InvestingPro, which offers 13 additional investment tips and comprehensive financial analysis.]
Macy’s has maintained its sales guidance for the full year, but the profit forecast has been reduced, with the new range accounting for scenarios from a deteriorating to a stable consumer environment. This comes as the company faces a 3.6% revenue decline in the last twelve months. Helgans noted the quantified impact of tariffs on Macy’s and described it as manageable.
The analyst’s commentary highlighted the company’s ongoing strategic and real estate adjustments, alongside commendable management of controllable aspects of the business. Helgans stated, "We continue to view the risk/reward as compelling for patient investors as [the] company makes progress on strategy & real estate changes, and executes well on controllables."
Despite a slight decline in comparable sales of 1%, Helgans believes that the current situation is not fully appreciated by the market, especially considering Macy’s approximately 6% dividend yield and a price-to-earnings (P/E) ratio of around 6.5x. The valuation presents, in the analyst’s view, an attractive opportunity for investors willing to wait for the company’s efforts to bear fruit.
In other recent news, Macy’s Inc. reported its first-quarter financial results for fiscal year 2025, surpassing Wall Street expectations with an adjusted earnings per share (EPS) of $0.16, compared to the forecast of $0.14. The company’s revenue also exceeded projections, coming in at $4.6 billion against the anticipated $4.4 billion. Despite these positive results, Macy’s management revised the full-year 2025 EPS outlook downwards to a range of $1.60 to $2.00, which is below the prior estimate of $2.05 to $2.25. Additionally, the company anticipates a decline in same-store sales of between -0.5% to -2.0%.
JPMorgan analyst Matthew Boss adjusted the price target for Macy’s stock, lowering it from $13.00 to $12.00, while maintaining a Neutral rating. Boss’s commentary followed Macy’s financial results, noting a smaller decline in same-store sales and a gross margin that remained flat at 39.2%. Macy’s also introduced new brands and expanded its store locations, contributing to its better-than-expected performance. The company remains cautious about tariff impacts and consumer spending trends, anticipating a gross margin contraction of 30 to 70 basis points. Macy’s continues to focus on strategic initiatives to capture market share in a challenging retail environment.
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