Macy's (M) AI Stock Analysis

• Market Cap: $5.32B
• Dividend Yield: 3.23%
• Average Volume (3M): 5.44M
• Price to Earnings (P/E): 11.8
• Beta (1Y): 1.12
• 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: 4,981,564
• 30 Day Avg. Volume: 5,435,883
• 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: 1.90
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 1.10
• Enterprise Value/Ebitda: 6.25
• 1Y Price Target: $21.33
• Price Target Upside: 6.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.19
• Revenue Forecast (FY): $21.59B

• Rating: 74 Outperform
• Price Target: $22.50 ▲(12.39% Upside)

Macy's overall stock score is driven by strong technical indicators and positive earnings call sentiment, reflecting strategic progress and growth in key areas. Financial performance shows recovery, but pressure on profitability margins and return on equity are areas to watch. Valuation remains reasonable, with an attractive dividend yield.

Positive Factors

Free Cash Flow Strength

Sustained 35.2% FCF growth materially improves Macy's ability to fund capital investments, logistics upgrades, dividends, and debt reduction without relying on external financing. Strong cash conversion increases resilience through retail cycles and supports strategic initiatives over the next 2–6 months.

Improving Leverage

A lower debt-to-equity ratio reflects disciplined balance sheet management, reducing interest burden and financial risk. Improved leverage gives Macy's more flexibility to invest in omnichannel capabilities and absorb industry volatility, supporting longer-term operational stability and strategic optionality.

Logistics & Omnichannel Investment

Opening a state-of-the-art distribution center enhances fulfillment speed and lowers per-unit delivery costs, strengthening Macy's omnichannel value proposition. Durable logistics improvements help improve customer satisfaction and margins as e-commerce continues to grow, a lasting competitive advantage.

Negative Factors

Tariff-Driven Margin Pressure

Material tariff headwinds compress gross margins and force either higher prices or margin sacrifice. Sourcing changes and pricing adjustments take quarters to implement, creating a persistent cost risk that can erode profitability and limit reinvestment capacity over the medium term.

Declining Return on Equity

A falling ROE signals reduced effectiveness in generating shareholder returns from invested capital. This decline can stem from margin compression, lower asset turns, or capital allocation choices, and it suggests weaker long-term profitability performance unless operational efficiency or sales mix improve.

Store Closures & Category Weakness

Planned closures shrink Macy's physical revenue base and reflect structural retail shifts; replacing lost sales requires strong e-commerce and merchandising execution. Coupled with active category softness, this necessitates durable assortment and marketing adjustments to avoid prolonged revenue erosion.

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

Macy's financial performance shows signs of recovery with improvements in revenue growth and cash flow generation. However, profitability margins and return on equity have seen some pressure, indicating areas for potential improvement. The company's leverage position has improved, but maintaining operational efficiency will be crucial for sustaining growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Negative
• Last Price: 20.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For M, the sentiment is Negative. The current price of 20.02 is below the 20-day moving average (MA) of 21.53, below the 50-day MA of 21.91, and above the 200-day MA of 16.05, indicating a neutral trend. The MACD of -0.60 indicates Positive momentum. The RSI at 35.04 is Neutral, neither overbought nor oversold. The STOCH value of 10.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$9.49B	16.52	28.98%	3.99%	-1.07%	-5.22%
M	74 Outperform	$5.32B	11.77	11.28%	3.23%	-2.83%	184.32%
MHO	71 Outperform	$3.50B	9.09	13.20%	―	4.77%	-9.30%
KSS	68 Neutral	$1.96B	9.91	5.02%	2.33%	-6.13%	-22.57%
PVH	66 Neutral	$2.86B	9.32	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	$7.47B	34.67	12.93%	1.95%	-4.56%	―

Macy's Corporate Events

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.