Macy’s (NYSE:M) popped being upgraded by JPMorgan to overweight from neutral. The Wall Street firm, which raised its price target on the retailer, said it has confidence in Macy’s bottom-line plan and expects to see multiyear EBITDA margins in the low double digits. Shares of Macy’s have declined about 13.1% so far this year, driven by selloffs in February and March.
Last week, the department store chain was downgraded by Gordon Haskett to Hold-Rated from Accumulate-Rated on Wednesday.
Analyst Chuck Grom and team commended Macy's management team, particularly CEO Jeff Gennette and CFO Adrian Mitchell, for delivering on many company-specific initiatives and doing an excellent job controlling inventory levels - but reminded that no company is immune to the macro pressures that are building. The firm also sees concerning data trends on Macy's for the short to medium-term that override the favorable view on the department store operator for the long-term.
"Our data reads through this past Saturday (March 25) have shown (1) moderating foot traffic trends at Macy's and across the entire department store complex in recent months after some improvement in the December/January timeframe; and (2) moderating digital visits (37.0% e-commerce penetration as of 4Q22), which until March showed positive growth this year versus 2019. Indeed, our data supports government statistics which in February showed similar trends, with department store retail sales decelerating 410 basis points on a 4-year geo-stack."
M shares acquired $1.36, or 7.8%, Monday to $18.85.
