Macy's (M) AI Stock Analysis

• Market Cap: $6.05B
• Dividend Yield: 3.23%
• Average Volume (3M): 6.32M
• Price to Earnings (P/E): 13.4
• Beta (1Y): 1.13
• Revenue Growth: -2.83%
• EPS Growth: 184.32%
• Country: US
• Employees: 94,189
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Department Stores
• EPS (TTM): 0.09
• Shares Outstanding: 265,883,120
• 10 Day Avg. Volume: 6,036,304
• 30 Day Avg. Volume: 6,315,028
• PEG Ratio: <0.01
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 5.76
• Enterprise Value/Market Cap: 1.78
• Enterprise Value/Revenue: 0.47
• Enterprise Value/Gross Profit: 1.17
• Enterprise Value/Ebitda: 6.65
• 1Y Price Target: $21.33
• Price Target Upside: -4.82% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.29
• Revenue Forecast (FY): $20.91B

• Rating: 67 Neutral
• Price Target: $24.00 ▲(7.10% Upside)
• Action: Downgraded Date: 02/19/26
• Date: Action: Downgraded 02/19/26

The score is driven primarily by steady but not strong financial performance—improving revenue and notably stronger free cash flow, tempered by thin margins and declining ROE. Valuation is supportive with a moderate P/E and solid dividend yield, while technicals are moderately constructive. The latest earnings call adds a positive boost from a meaningful EPS beat and raised guidance, partly offset by tariff-related margin risk.

Positive Factors

Strong free cash flow generation

A 35.2% TTM increase in free cash flow indicates durable cash generation that funds dividends, share repurchases, debt reduction and transformation spending. Strong FCF improves financial flexibility, lowers refinancing risk and supports execution of long-term strategic initiatives.

Improved omnichannel fulfillment capacity

Opening a state-of-the-art distribution center materially improves fulfillment efficiency and unit economics for online orders. This structural capacity helps lower delivery costs, accelerate delivery times, and sustain omnichannel growth, making the business more competitive over the medium term.

Strength in higher-margin luxury segment & customer engagement

Strong comps at Bloomingdale's and record NPS reflect durable demand and brand positioning in higher-margin assortments. Improved customer engagement and curation support pricing power, repeat purchases and long-term margin resilience versus reliance on discounting.

Negative Factors

Thin profitability and declining ROE

Low net margins and a falling ROE signal limited profitability capacity versus invested capital. This structural margin thinness constrains reinvestment, reduces cushion against cost shocks, and means slower capital returns unless operating efficiency or higher-margin mix improves sustainably.

Tariff-driven margin pressure

Ongoing tariff exposure represents a structural cost headwind to gross margins unless fully passed to consumers. Persistent import cost volatility can compress margins, force higher prices that hurt demand, or require margin-dilutive promotion strategies to preserve comps.

Revenue loss from store closures and footprint shrinkage

Closing underperforming stores reduces scale and square-foot productivity, creating execution risk to replace lost sales via digital channels. The structural transition raises fixed-cost allocation challenges and may depress top-line and operating leverage during the rebalancing period.

Macy's Business Overview & Revenue Model

Company Description

Macy's, Inc., an omni-channel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, such as apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of January 29, 2022, it operated 725 department stores in the District of Columbia, Puerto Rico, and Guam under the Macy's, Macy's Backstage, Market by Macy's, Bloomingdale's, Bloomingdale's The Outlet, Bloomies, and bluemercury brands. It also operates in Dubai, the United Arab Emirates, and Al Zahra, Kuwait under the license agreements. The company also operates as a beauty products and spa retailer. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's, Inc. was founded in 1830 and is based in New York, New York.

How the Company Makes Money

Macy's generates revenue primarily through the sale of merchandise in its department stores and online. The company operates on a retail model that includes a mix of full-price sales and promotional discounts. Key revenue streams include apparel, accessories, cosmetics, and home furnishings. Additionally, Macy's earns income from its private label credit card program, which allows customers to finance purchases and earn rewards. Partnerships with various brands and designers also play a significant role in driving traffic and sales, along with strategic initiatives like loyalty programs and targeted marketing campaigns that enhance customer engagement and retention.

Macy's Financial Statement Overview

Summary

Moderate fundamentals: revenue returned to growth (TTM +4.4%) and free cash flow improved strongly (TTM FCF +35.2%). Offsetting this, profitability remains thin with net margin down to 2.1% and some pressure on EBIT/EBITDA margins, while ROE also declined despite modestly improved leverage.

Income Statement

Macy's has shown a moderate improvement in its income statement metrics over the TTM period. The gross profit margin remains stable at around 40%, indicating efficient cost management. However, the net profit margin has decreased slightly to 2.1% from the previous annual report's 2.5%, reflecting some pressure on profitability. Revenue growth has been positive at 4.4% in the TTM, reversing the previous year's decline. EBIT and EBITDA margins have also seen a slight decline, suggesting challenges in operational efficiency.

Balance Sheet

The balance sheet shows a mixed picture. Macy's has managed to reduce its debt-to-equity ratio to 1.21 in the TTM, down from 1.25 in the previous year, indicating improved leverage management. However, the return on equity has decreased to 10.75% from 12.79%, suggesting a decline in the company's ability to generate returns from its equity base. The equity ratio remains stable, reflecting a balanced asset structure.

Cash Flow

Cash flow metrics are strong, with a significant 35.2% growth in free cash flow in the TTM, indicating robust cash generation capabilities. The operating cash flow to net income ratio is healthy at 0.26, although slightly lower than the previous year's 0.28. The free cash flow to net income ratio has improved to 0.70, suggesting better cash conversion efficiency.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	22.71B	23.01B	23.87B	25.45B	25.40B	18.10B
Gross Profit	9.17B	9.27B	9.64B	10.10B	10.44B	5.81B
EBITDA	1.62B	1.76B	1.07B	2.50B	3.00B	-3.54B
Net Income	478.00M	582.00M	45.00M	1.15B	1.43B	-3.94B
Balance Sheet
Total Assets	17.06B	16.40B	16.25B	16.87B	17.59B	17.71B
Cash, Cash Equivalents and Short-Term Investments	447.00M	1.31B	1.03B	862.00M	1.71B	1.68B
Total Debt	5.24B	5.71B	5.98B	6.40B	6.83B	8.33B
Total Liabilities	12.74B	11.85B	12.21B	12.78B	13.97B	15.15B
Stockholders Equity	4.33B	4.55B	4.04B	4.08B	3.62B	2.55B
Cash Flow
Free Cash Flow	1.09B	760.00M	312.00M	320.00M	2.12B	183.00M
Operating Cash Flow	1.55B	1.28B	1.30B	1.61B	2.71B	649.00M
Investing Cash Flow	-562.00M	-592.00M	-913.00M	-1.17B	-370.00M	-325.00M
Financing Cash Flow	-862.00M	-413.00M	-220.00M	-1.30B	-2.38B	699.00M

Macy's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For M, the sentiment is Positive. The current price of 22.41 is above the 20-day moving average (MA) of 21.32, above the 50-day MA of 22.07, and above the 200-day MA of 16.81, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 55.63 is Neutral, neither overbought nor oversold. The STOCH value of 71.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for M.

Macy's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DDS	76 Outperform	$10.42B	18.12	28.98%	3.99%	-1.07%	-5.22%
MHO	71 Outperform	$3.71B	9.63	13.20%	―	4.77%	-9.30%
KSS	68 Neutral	$2.17B	11.33	5.02%	2.33%	-6.13%	-22.57%
M	67 Neutral	$6.05B	13.39	11.28%	3.23%	-2.83%	184.32%
PVH	64 Neutral	$3.18B	10.40	6.70%	0.22%	0.52%	-45.80%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
VFC	53 Neutral	$8.09B	37.52	12.93%	1.95%	-3.12%	―

Macy's Corporate Events

Macy’s Updates Financial Disclosure Metrics Under Transformation Strategy

On February 18, 2026, Macy’s, Inc. announced it is overhauling certain financial disclosure metrics as it approaches the two-year mark of its Bold New Chapter strategy, while stressing that the changes do not affect GAAP financial reporting or require any restatement of past results. The retailer will streamline comparable sales reporting around four go-forward owned, licensed and marketplace (OLM) metrics, add OLM dollar sales and total revenue disclosures for the go-forward business, and refine non-GAAP earnings definitions to exclude gains on real estate sales and benefit plan income, moves that are intended to sharpen investor visibility into the performance and growth trajectory of its core operating portfolio as it closes underperforming locations and recasts historical data from 2023 to 2025.

The most recent analyst rating on (M) stock is a Hold with a $24.00 price target. To see the full list of analyst forecasts on Macy’s stock, see the M Stock Forecast page.

Macy’s Finalizes Separation Agreement with Former COO

On December 8, 2025, Macy’s, Inc. finalized a compensatory agreement with Adrian V. Mitchell, the former COO and CFO, providing him a $2.7 million cash payment as part of his separation compensation. This agreement also releases both parties from claims and ends Mr. Mitchell’s non-competition obligations, potentially impacting Macy’s leadership dynamics and competitive strategies.

The most recent analyst rating on (M) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Macy’s stock, see the M Stock Forecast page.