What’s Next For Macy’s Stock After An 8% Move Last Week?

by Trefis Team
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Macy’s stock (NYSE: M), a department store chain, increased by 8% in the last five trading days (one week). In comparison, the broader S&P500 index grew marginally over the same period. The company announced its plans to hire 76,000 employees for the upcoming holiday season, with approximately 37% of these new hires in permanent positions. Last year, about 6,800 seasonal workers remained with the company after holiday hiring in 2020. That said, the market reacted upward to this news probably because Macy’s has fewer stores this year than in previous years, and yet they are hiring roughly the same amount of people for this holiday season. By the look of things, the company looks well-positioned to mitigate supply chain issues heading into the back half of the fiscal year.

Macy’s saw a stellar fiscal second-quarter after beating revenue and earnings expectations. The retailer’s sales increased 2% to $5.65 billion and adjusted earnings per share (EPS) more than quadrupled to $1.29 compared to the fiscal 2019 quarter. To add to this, the company’s comparable sales increased 5.9% relative to the second quarter of 2019. It should be noted that Macy’s expenses remained well below the 2019 levels, due to store closures, cost-cutting measures, and temporary under-staffing related to the tight labor market. Looking ahead, the company continues to expect significant earnings growth in Q3 as well, with adjusted EPS of $0.17 to $0.26, up from $0.07 in Q3 2019. However, it also estimates Q3 sales to come in between $5.04 billion and $5.19 billion, compared to $5.17 billion two years ago. This forecast implies a sequential slowdown in growth, most likely due to the recent surge in Covid-19 cases associated with the Delta variant.

Now, is M stock poised to grow? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 55% chance of a rise in M stock over the next month (twenty-one trading days). See our analysis on Macy’s Stock Chance Of Rise for more details.

And if you are considering M’s stock as an investment option over a longer time frame, you can also explore Macy’s Revenue Comparison up against its peers and history.

[1] 8.1% or higher return during five-day period in 174 times out of 2516; Stock rose in the next five days in 87 of these 174 instances

[2] 15% or higher return during ten-day period in 116 times out of 2516; Stock rose in the next ten days in 48 of these 116 instances

[3] 0.5% or higher return during twenty-one-day period in 1343 times out of 2515; Stock rose in the next twenty-one days in 739 of these 1343 instances

While Macy’s stock is likely to move higher in the near term, there are several stocks in its S&P500 that look like a Better Bet Than M stock. Also, Macy’s Peer Comparisons summarizes how the company fares against peers on metrics that matter.

 

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