Macy's Shares Surge Nearly 30%, Yet Valuation Remains Below Peers
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Strong Stock Performance: Macy's shares have surged nearly 30% year-to-date, significantly outperforming the S&P 500's 15% increase, indicating market recognition of its future potential.
- Valuation Discrepancy: Currently trading at a price-to-earnings ratio of approximately 12.5 times, Macy's remains undervalued compared to Kohl's at 20 times and Dillard's at 34 times, suggesting considerable room for stock price appreciation.
- Earnings Expectations Comparison: Analysts forecast Macy's earnings per share at $2.21 for 2027, while Kohl's and Dillard's are expected at $1.23 and $27.92 respectively, highlighting that Macy's low valuation may be a market misjudgment.
- Strategic Turnaround Plan: Macy's is executing its
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Analyst Views on M
Wall Street analysts forecast M stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for M is 21.33 USD with a low forecast of 8.00 USD and a high forecast of 27.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
2 Buy
9 Hold
1 Sell
Hold
Current: 20.020
Low
8.00
Averages
21.33
High
27.00
Current: 20.020
Low
8.00
Averages
21.33
High
27.00
About M
Macy's, Inc. is an omni-channel retail company. The Company operates stores, websites and mobile applications under three brands, Macy's, Bloomingdale's and Bluemercury, which sell a range of merchandise, including apparel and accessories (men's, women's and kids'), cosmetics, home furnishings and other consumer goods. The Company has stores in 43 states, the District of Columbia, Puerto Rico and Guam. Its operations are conducted through Macy's, Macy's Backstage, Macy's small format, Bloomingdale's, Bloomingdale's The Outlet, Bloomie's, and Bluemercury. In addition, Bloomingdale's in Dubai, United Arab Emirates and Al Zahra, Kuwait are operated under a license agreement with Al Tayer Insignia. The principal private label brands offered by the Company include Alfani, And Now This, Aqua, Bar III, Cerulean 6, Charter Club, Club Room, Epic Threads, first impressions, Giani Bernini, Holiday Lane, Home Design, Hotel Collection, Hudson Park, Ideology, I-N-C, jenni, JM Collection, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Department Store Downturn Continues as Macy's Closes 14 Locations
- Industry Downturn Intensifies: According to the 2026 Business of Fashion survey by McKinsey, 46% of fashion executives anticipate worsening conditions in 2026, indicating a lack of confidence in the retail market that could lead to reduced consumer choices and further impact sales performance.
- Macy's Store Closures: As part of its 'Bold New Chapter' restructuring plan, Macy's will close 14 locations across 11 states in 2026, following the closure of 50 stores in 2024 and 66 in 2025, demonstrating its commitment to navigating market challenges.
- Saks Off 5th Bankruptcy Liquidation: Saks Off 5th Holdings LLC received bankruptcy court approval in January 2026 to liquidate all merchandise from its e-commerce platform, expected to last up to eight weeks, reflecting the retailer's desperate measures amid liquidity constraints.
- Consultant Fee Structure: Under the consulting agreement with GA Retail Solutions, Saks Off 5th Digital will pay a retail base fee of 2% to 2.25% of gross proceeds, with a minimum fee of $250,000, alongside 5% on wholesale sales and 15% on FF&E sales, highlighting the financial pressures during the liquidation process.
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Dupree Financial Group Sells 486,867 Shares of Macy's
- Share Sale Details: Dupree Financial Group sold 486,867 shares of Macy's in Q4, with an estimated transaction value of $9.97 million, reducing its stake in Macy's to 2.6% of its assets under management.
- Position Value Change: Following the sale, the value of Dupree's position in Macy's dropped by $7.40 million, indicating the impact of market price fluctuations on its investment portfolio.
- Macy's Performance Overview: Despite challenges like low margins and inventory risks, Macy's reported $4.7 billion in revenue in Q3, achieving its strongest comparable sales growth in 13 quarters, showcasing resilience in the retail market.
- Investor Focus: The sale reflects Dupree's strategic shift towards income and defensive investments; although Macy's has outperformed the S&P 500, it remains a tactical holding rather than a core investment, highlighting caution towards cyclical retailers.
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