Mk Restaurant Group
M
$21.51
-4.19%
Macy's Inc. is a leading American department store retailer operating approximately 430 Macy's stores, 60 Bloomingdale's locations, and 170 Bluemercury beauty stores, alongside a robust e-commerce presence. As a legacy player in the Consumer Cyclical sector, Macy's distinguishes itself through its iconic brand portfolio and nationwide footprint, though it faces intense competition from off-price retailers and e-commerce giants. The current investor narrative centers on the credibility of its turnaround strategy, highlighted by a Q1 2026 earnings beat and raised full-year guidance, yet persistent skepticism remains about the sustainability of sales recovery in a fragile consumer environment. Recent news also points to broader market dynamics, including Berkshire Hathaway's portfolio shifts, which may indirectly influence sentiment toward cyclical retail names.…
M
Mk Restaurant Group
$21.51
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Investment Opinion: Should I buy M Today?
Based on the analysis, I rate Macy's as a Hold. The stock is attractively valued with a trailing PE of 8.45x and a price-to-sales ratio of 0.24x, but the consensus analyst target of $23.23 offers only 0.78% upside, indicating limited near-term appreciation potential. The Q1 2026 earnings beat and raised guidance provide some optimism, but the overall analyst sentiment remains neutral, reflecting skepticism about the sustainability of the turnaround.
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M 12-Month Price Forecast
The AI assessment is neutral with medium confidence. Macy's offers a compelling valuation and has shown signs of a turnaround, but the lack of analyst conviction and modest growth prospects temper enthusiasm. The stock's recent underperformance suggests fading momentum, while the low PE provides a margin of safety. To upgrade to a bullish stance, we would need to see sustained revenue growth above 3% and positive earnings revisions. Conversely, a downgrade to bearish would occur if sales decline or the company's debt levels become unsustainable.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Mk Restaurant Group's 12-month outlook, with a consensus price target around $23.45 and implied upside of +9.0% versus the current price.
Average Target
$23.45
0 analysts
Implied Upside
+9.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$10 - $30
Analyst target range
Macy's is covered by 11 analysts, with a consensus recommendation of 'hold' and a mean recommendation score of 2.92 (where 1 is strong buy and 5 is sell), indicating a neutral to slightly bearish stance. The average price target is $23.23, which is only 0.78% above the current price of $23.05, implying minimal upside. The distribution of ratings shows no strong buy or sell recommendations, with most analysts at 'hold' or 'neutral', reflecting skepticism about the company's growth prospects despite the recent turnaround. The low target of $10.00 suggests a scenario where the turnaround fails and sales decline further, while the high target of $30.00 implies a successful execution of the strategy with significant margin expansion. The wide range between low and high targets (200% spread) indicates high uncertainty among analysts about Macy's future performance, which is typical for a retailer undergoing a transformation. Recent institutional ratings from firms like TD Cowen, Citigroup, and JP Morgan have all maintained 'hold' or 'neutral' stances, with no recent upgrades or downgrades, suggesting that analysts are waiting for more evidence of sustainable improvement before changing their outlook.
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Bulls vs Bears: M Investment Factors
Macy's presents a mixed investment case with compelling value metrics and a credible turnaround narrative, yet faces significant structural headwinds. The bull case is anchored by a low valuation (PE 8.45x), strong free cash flow ($1.5B), and a Q1 earnings beat that lifted guidance, while the bear case highlights minimal analyst upside (0.78%), high debt (D/E 1.07), and modest revenue growth (2.07%). Currently, the bearish evidence is slightly stronger given the analyst consensus and the stock's recent pullback, but the low valuation provides a margin of safety. The most critical tension is whether Macy's can sustain its sales recovery and margin improvement in a fragile consumer environment, which would determine if the stock re-rates higher or remains undervalued.
Bullish
- Q1 2026 Earnings Beat and Raised Guidance: Macy's reported Q1 2026 revenue of $4.892 billion, a 2.07% YoY increase, and EPS of $0.24, beating expectations. The company raised its full-year guidance, providing tangible evidence that its turnaround strategy is gaining traction and boosting investor confidence.
- Strong Stock Momentum Outperforming Market: Macy's stock has surged 33.7% over the past year, significantly outperforming the S&P 500's 18.65% gain. The 6-month change of +26.16% underscores a sustained uptrend, reflecting growing investor optimism about the company's strategic initiatives.
- Attractive Valuation with Low PE and PS Ratios: With a trailing PE of 8.45x and a price-to-sales ratio of 0.24x, Macy's trades at a substantial discount to the broader market. The EV/EBITDA of 5.10x further highlights the stock's cheap valuation, offering a potential margin of safety for value investors.
- Strong Free Cash Flow Generation: Macy's generated $1.502 billion in trailing twelve-month free cash flow, providing ample liquidity to support debt reduction, dividend payments, and strategic investments. This robust cash generation underpins the company's financial flexibility and shareholder return capacity.
Bearish
- Analyst Consensus is Hold with Minimal Upside: The average analyst price target is $23.23, only 0.78% above the current price of $23.05, implying limited upside. With a consensus recommendation of 'hold' and a mean score of 2.92, analysts remain skeptical about Macy's growth prospects despite the recent turnaround.
- High Debt-to-Equity Ratio of 1.07: Macy's debt-to-equity ratio stands at 1.07, indicating a significant debt burden relative to equity. This leverage increases financial risk, especially if sales growth stalls or interest rates remain elevated, potentially constraining the company's ability to invest in growth initiatives.
- Modest Revenue Growth in a Mature Sector: Q1 2026 revenue growth of only 2.07% YoY reflects the challenges of the mature department store sector. With intense competition from off-price retailers and e-commerce giants, Macy's struggles to achieve meaningful sales acceleration, limiting earnings growth potential.
- High Beta and Market Sensitivity: Macy's beta of 1.431 indicates high sensitivity to market movements, making the stock more volatile than the broader market. In a downturn, this could lead to outsized losses, particularly given the cyclical nature of consumer discretionary spending.
M Technical Analysis
Macy's stock has demonstrated a robust recovery over the past year, with a 1-year price change of +33.7%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $23.05 sits at 86.6% of its 52-week range (low: $16.41, high: $26.59), indicating the stock is trading near the upper end of its yearly band, which typically reflects strong momentum but also potential overextension. The 6-month change of +26.16% further underscores a sustained uptrend, though the stock remains below its 52-week high of $26.59, suggesting some resistance at that level.
Beta
1.43
1.43x market volatility
Max Drawdown
-29.9%
Largest decline past year
52-Week Range
$16-$27
Price range past year
Annual Return
+25.0%
Cumulative gain past year
| Period | M Return | S&P 500 |
|---|---|---|
| 1m | -13.6% | -1.4% |
| 3m | -14.1% | +3.3% |
| 6m | +26.2% | +15.1% |
| 1y | +25.0% | +17.2% |
| ytd | -5.5% | +11.8% |
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M Fundamental Analysis
Macy's revenue trajectory shows modest growth, with the most recent quarter (Q1 2026, ending May 2, 2026) reporting revenue of $4.892 billion, a 2.07% year-over-year increase. This follows a pattern of fluctuating quarterly revenues: Q4 2025 saw $7.916 billion, Q3 2025 $4.913 billion, and Q2 2025 $4.999 billion, indicating a seasonal retail pattern with a strong holiday quarter. The growth rate is positive but modest, reflecting the challenges of a mature department store sector. Revenue segments reveal that Women's Accessories, Shoes, Cosmetics, and Fragrances is the largest category at $1.986 billion, followed by Women's Apparel at $1.142 billion, while Home Other contributes $589 million, showing the importance of softlines to Macy's business.
Quarterly Revenue
$4.9B
2026-05
Revenue YoY Growth
+2.1%
YoY Comparison
Gross Margin
41.5%
Latest Quarter
Free Cash Flow
$1.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is M Overvalued?
Given that Macy's is profitable with a trailing twelve-month net income of $63 million (Q1 2026), the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 8.45x, while the forward PE is 9.74x, indicating that the market expects earnings to decline slightly over the next year, which is unusual for a growth-oriented stock but consistent with a mature retailer. The gap between trailing and forward PE suggests that analysts anticipate a normalization of earnings after a strong recent period, possibly due to one-time gains or cost savings. The price-to-sales ratio of 0.24x and EV/EBITDA of 5.10x provide additional context, with the low PS ratio indicating the market values Macy's at a significant discount to its sales, typical for low-margin retailers.
PE
8.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 3x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
5.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are notable for Macy's. The company carries a debt-to-equity ratio of 1.07, indicating substantial leverage that could strain cash flows if sales decline or interest rates rise. While free cash flow is robust at $1.5 billion, net income of only $63 million in Q1 2026 shows thin margins (net margin 2.84%), leaving little room for error. Revenue concentration in softlines (64% of sales) exposes the company to fashion trends and consumer discretionary spending shifts, which can be volatile. Additionally, the negative spread between trailing PE (8.45x) and forward PE (9.74x) suggests the market expects earnings to decline, adding uncertainty to the financial outlook.