As of February 28, Macy’s (M) stock was rated a “hold” by 14 out of 20 analysts (70%). Four analysts had a “buy” recommendation while two had a “sell” rating.
There have been no changes in analysts’ ratings since Macy’s announced its fiscal 4Q17 results on February 27. However, several analysts have revised their price targets in reaction to the company’s fourth-quarter results.
On February 27, Jefferies raised its price target for Macy’s to $27 from $22. On February 28, Cowen and Company revised its price target for Macy’s stock to $30 from $23. On the same day, RBC Capital increased its price target to $31 from $26. Morgan Stanley raised its price target to $27 from $23.
As of February 28, the 12-month average price target for Macy’s stock was $29.60. This price estimate indicates an upside potential of about 0.7%. Macy’s stock has risen 16.8% on a year-to-date basis.
Macy’s (M) and its rival department stores are struggling in a challenging retail environment. To fight the intense rivalry from Amazon (AMZN), Macy’s has been investing heavily in digital business growth and in enhancing customer online shopping experience.
The company is also looking for growth in the off-price business space through its Macy’s Backstage stores. In fiscal 2017, Macy’s opened 30 Backstage off-price stores within existing Macy’s locations.
In fiscal 2018, Macy’s plans to open 100 Macy’s Backstage in-stores, including certain stores within some of the company’s premium malls. In fiscal 2017, Macy’s opened 36 Bluemercury stores to capture growth opportunities in the beauty space.
Macy’s continues to streamline its stores by closing unprofitable locations. In August 2016, Macy’s announced its intention to close 100 stores. With the closure of the Redmond Town Center main store in Redmond, Washington, in early 2019, the company plans to complete the closure of 83 of the planned 100 stores.