In a report released today, Oliver Chen from TD Cowen maintained a Hold rating on Macy’s, with a price target of $17.00.
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Oliver Chen has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for Macy’s. The company has shown some positive signs, such as beating Street expectations with a slight increase in owned comparable sales and raising its full-year EPS guidance. Macy’s has also demonstrated resilience in consumer spending across various categories, which has contributed to better-than-expected gross margins and stock performance.
However, Chen also highlights concerns that temper the outlook. The valuation of Macy’s is relatively high compared to its historical average, and there are questions about its relevance to younger consumers and its ability to consistently achieve higher comparable sales growth. Additionally, while other income sources like credit card and digital advertising revenues are significant contributors to profitability, there is a desire for stronger performance from the core retail operations. These mixed factors lead to a cautious Hold rating, reflecting both the potential for upside and the risks involved.
In another report released on August 26, Citi also maintained a Hold rating on the stock with a $12.00 price target.