Macy’s Hold Rating: Strong Q3 Performance Overshadowed by Cautious Future Guidance

Paul Lejuez, an analyst from Citi, maintained the Hold rating on Macy’s. The associated price target remains the same with $19.00.

Paul Lejuez has given his Hold rating due to a combination of factors including Macy’s recent performance and future guidance. The company reported a significant outperformance in the third quarter, with sales and gross margins exceeding expectations, and comparable sales showing the best results in thirteen quarters. However, despite these positive results, Macy’s provided a conservative fourth-quarter guidance, which was below consensus estimates, indicating management’s cautious outlook.
Additionally, while Macy’s adjusted earnings per share surpassed expectations, the guidance for the fiscal year suggests a decline in sales and gross margins. The company’s inventory levels slightly increased, aligning with sales growth, but the overall expected share price return remains negative. These mixed signals, with strong past performance but cautious future guidance, contribute to the Hold rating, suggesting that investors may want to wait for more clarity on future trends before making any decisive moves.

In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a $17.00 price target.