Consensus analyst recommendation
The consensus analyst recommendation on Wall Street for Macy’s (M) is “hold,” which 13 out of 23 analysts recommend. Meanwhile, eight analysts have a “buy” recommendation and two analysts have a “sell” recommendation on the stock.
The stock’s average 12-month target price is $46.0, which means the stock has a return potential of 18.0% over the next 12 months.
Apart from Goldman Sachs, other investment brokerage firms that have a “hold” recommendation on the stock include J.P, Morgan, Morgan Stanley, and UBS. Firms with a “buy” recommendation include Nomura and Credit Suisse, which feel that Macy’s (M) earnings are bottoming out.
Earnings trend and valuation multiples
Wall Street is anticipating that Macy’s (M) earnings should bottom out at the end of fiscal 2016, and then earnings should start growing in fiscal 2017. The current PE (price-to-earnings) ratio for the company is 9.3x, and a decline of 3% in EPS (earnings per share) is expected in fiscal 2016, which increases the forward PE ratio to 9.6x. Macy’s stock (M) is trading cheaper than its peers like Nordstrom (JWN) and Kohl’s (KSS), which have forward PE multiple of 16.5x and 10.2x, respectively. Macy’s is also cheaper than the industry (XLY) (XRT) average of 11.0x.