Macy's Analyst Roundup After Q3 Results

Macy’s, Inc. M beat Q3 earnings estimates Wednesday but lowered its full-year forecast.

Investor’s responded positively and the stock closed Wednesday at $61.57, up 5.1 percent.

Below are some some analyst responses to the earnings news along with current ratings and price targets.

Credit Suisse - Outperform, $60 price target

“The company has made clear that margins are unlikely to expand further as it focuses on gaining market share. In terms of its strategy, focusing on tailoring its merchandising to the needs of the customer appears to be working—the company posted continued gains in handbags and Millennial ready-to-wear. At the same time, the company's capital allocation story remains disciplined and rational, as it continues to repurchase shares, grow its dividend, and avoid overlevering. As the retail industry nears its sixth year of the recovery, in an environment of decelerating sales and rising costs, Macy's remains one of the few retailers with a validated strategy and consistent execution.”

Morgan Stanley - Over Weight, $66 price target

"We estimate SG&A dollars will grow $51M y/y in 4Q, after - $92M, +$25M and -$41M in the three quarters YTD. Our estimates imply that FY SG&A dollars would decline $57M from 2013 levels. SG&A this year benefited from $100M cost saves, $165M lower retirement expenses and ~$30M in credit income, offset by y/y increase in D&A ($20M), healthcare costs and omni channel investments. Net of all these, we estimate “core” SG&A is growing at a <1 percent annual rate, demonstrating management's impressive cost control. 3Q share buybacks bring YTD total to 25M shares or $1.5B (~7 percent of market cap), reflecting M's best-in-class FCF generation and balance sheet strength. M has grown EPS y/y every single quarter since 3Q09 and 30 percent y/y EPS growth this quarter will likely be one of retail's best."

Gilford Securities - Buy, $70 price target

"The ways in which Macy’s has been evolving convinces us it will be a winner in retailing and cope with periodic adversities, such as the slowdown in sales during 3Q/14. Its omnichannel merchandising efforts are continually improving, its merchandise offers are being refined for greater localization—notably for gifts during the holiday season, and it is adding licensees that provide products and brands it does not have and cannot obtain. It might add a licensee for tech products. This encourages us because consumer
spending, especially by younger shoppers, has shifted in that direction."