In a report released yesterday, Jay Sole from UBS reiterated a Sell rating on Macy’s, with a price target of $6.00.
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Jay Sole has given his Sell rating due to a combination of factors impacting Macy’s financial outlook. Despite Macy’s raising its FY25 adjusted EPS guidance, the increase is modest and primarily driven by reduced interest expenses and share count rather than substantial operational improvements. The company’s gross margin guidance has been lowered, partly due to tariffs, which indicates potential challenges in maintaining profitability.
Moreover, Macy’s total revenues have declined, contrasting with competitors like TJX, ROST, and BURL, which have shown sales growth. This suggests Macy’s may be losing market share to these retailers and online channels. Additionally, the pressure from consumers shifting to online shopping and brands’ own stores is expected to continue affecting Macy’s earnings negatively. These factors contribute to a cautious long-term earnings outlook, justifying the Sell rating.
According to TipRanks, Sole is a 4-star analyst with an average return of 6.5% and a 52.46% success rate. Sole covers the Consumer Cyclical sector, focusing on stocks such as Deckers Outdoor, Macy’s, and Kohl’s.