Sprouts Farmers Market closes $600 million revolving credit facility
On Friday, Citi analyst Paul Lejuez revised Macy’s (NYSE:M) price target to $14.00 from the previous $16.00, while keeping a Neutral rating on the shares. The stock, currently trading at $13.22, has declined nearly 8% in the past week and is down 22% year-to-date, according to InvestingPro data. The adjustment follows Macy’s fourth-quarter comparable sales, which aligned with the figures released during the holiday sales period and showed improvement compared to previous quarters. However, Lejuez noted that quarter-to-date trends indicate a slowdown in comparable sales. He acknowledged that while part of this slowdown could be attributed to weather conditions, it appears that Macy’s consumers are experiencing pressures beyond those caused by weather.
Lejuez pointed out that Macy’s management has not factored any improvement in the macroeconomic environment into its guidance, which he considers a cautious and appropriate approach given the volatility of current trends. The company maintains strong financial health with a current ratio of 1.43 and a robust Piotroski Score of 7, as reported by InvestingPro. He commended the management’s strategic decisions to close underperforming stores and concentrate on their top-performing locations.
Despite these efforts, Lejuez expressed concerns about the broader challenges facing department stores, a sector he believes is under secular pressure due to the availability of their products from alternative retail sources. This is compounded by near-term headwinds that the segment is currently facing.
In his analysis, Lejuez concluded that the stock’s valuation is not high, but emphasized the difficulties inherent in operating a department store at this time. He believes that the risk/reward balance for Macy’s stock is currently even, considering both the strategic moves by management and the ongoing challenges in the retail sector.
In other recent news, Macy’s Inc. reported its fourth-quarter earnings for 2025, surpassing expectations with an earnings per share (EPS) of $1.80, though revenue slightly missed forecasts at $7.77 billion. Despite the EPS beat, the company’s guidance for fiscal year 2025 projects an EPS range of $2.05 to $2.25, below the consensus estimate of $2.26. Analysts have responded with mixed ratings; JPMorgan downgraded Macy’s stock to Neutral, lowering the price target from $19 to $14, due to concerns about future earnings potential. Similarly, CFRA adjusted its price target to $13 from $15 while maintaining a Hold rating, citing anticipated long-term challenges in the department store sector.
Citi, however, maintained a Neutral rating with a price target of $16, acknowledging the earnings beat but noting that Macy’s first-quarter guidance for 2025 did not meet consensus expectations. Macy’s management has forecasted a decline in same-store sales of 2.5% to 4.5% for the first quarter, contrasting with the consensus projection of flat sales. The company also closed 64 underperforming stores and improved delivery speeds, which are part of its strategic focus on long-term growth despite challenging market conditions. Macy’s anticipates a full-year comparable sales decline of 1.25% at the midpoint, reflecting a cautious outlook amid economic uncertainties.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.