Macy’s stock PT cut, In Line rating retained with concerns over SSS acceleration By Investing.com

On Wednesday, Evercore ISI adjusted its price target for Macy’s shares (NYSE:), decreasing it to $16.00 from the previous $17.00 while maintaining an In Line rating for the stock. The adjustment comes after Macy’s reported a second-quarter earnings per share (EPS) of $0.53. When accounting for one-time asset sales amounting to $0.10, the adjusted EPS stands at $0.43, which surpasses both the analyst’s estimate of $0.26 and the consensus estimate of $0.30.

The retailer’s financial performance was bolstered by improved margins, with the gross margin rising by 240 basis points to 40.5%, which is higher than both the analyst’s and the consensus estimates of 39.9% and 40.1%, respectively. Despite the better margins, Macy’s experienced a steeper than anticipated decline in net sales, dropping by 3.8% year-over-year, which did not meet expectations set by both the analyst and the consensus, which were -1.9% and -1.7%, respectively.

Same-store sales (SSS) also presented a disappointing figure, contracting by 4% at owned stores compared to the anticipated -0.7% and -1.0% from the analyst and consensus. In response to the underwhelming results, Macy’s revised its second-half net sales forecast downward between -2.6% to -1.3% and EPS forecast between -13.5% to -8.4%.

Despite the reduced outlook for the second half of the year, there is a projection for same-store sales to potentially improve, with expectations ranging from a decrease of 2.1% to a slight increase of 0.5%. This forecast comes after a 3.3% decline in the second quarter.

Historically, Macy’s has managed to boost same-store sales with strong holiday strategies, but the assumption that trends will improve following a downturn in the second quarter has led to the belief that the stock will remain range-bound in the near term, especially after experiencing a decline in trading on Wednesday.

In other recent news, Macy’s has seen several significant developments in its financial outlook and strategic direction. The company reported robust second-quarter earnings per share (EPS) of $0.53, surpassing consensus estimates by $0.24, despite revenues falling short at $4.9 billion, which is $108 million below expectations.

CFRA and Citi have revised Macy’s stock price target down to $17, maintaining a neutral stance, while TD Cowen and Evercore ISI have adjusted their price targets to $19 and $17 respectively, both retaining their hold ratings.

In an effort to improve customer experience and modernize operations, Macy’s has appointed Keith Credendino as the new Chief Information Officer, succeeding Laura Miller. On the retail front, Macy’s, along with other U.S. retailers, are accelerating their holiday merchandise imports in anticipation of potential labor strikes and ongoing shipping disruptions.

These are recent developments and indicate a mix of challenges and improvements within the company. Despite facing persistent long-term difficulties, Macy’s continues to strive for growth, backed by a stronger balance sheet and enhanced inventory management.

InvestingPro Insights

Following Evercore ISI’s price target adjustment for Macy’s (NYSE:M), InvestingPro data and tips provide additional context for investors considering the stock. With a market capitalization of $4.37 billion and a high trailing twelve-month P/E ratio of 355.45, Macy’s valuation is a key point of interest. However, when adjusted for the last twelve months as of Q1 2025, the P/E ratio becomes much more reasonable at 5.44, suggesting that the company’s earnings may be on an upward trajectory. Moreover, the company’s stock has shown significant movement with a 10.32% return over the last week, indicating notable investor interest or market activity.

InvestingPro Tips highlight that analysts are optimistic about Macy’s profitability, with net income expected to grow this year and four analysts having revised their earnings estimates upwards for the upcoming period. Such upward revisions often signal confidence in a company’s financial health and future performance. Additionally, Macy’s is recognized as a prominent player in the Broadline Retail industry and has shown commitment to shareholders by maintaining dividend payments for 22 consecutive years, with a current dividend yield of 3.92%.

For investors seeking a more detailed analysis, there are additional InvestingPro Tips available, offering deeper insights into Macy’s financials and market position. These tips can be accessed by visiting the InvestingPro platform for Macy’s specific stock page.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.