Mk Restaurant Group
M
$23.38
+0.21%
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 department store industry, 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 Macy's turnaround strategy, which gained credibility after a Q1 2026 earnings beat and raised full-year guidance, yet Wall Street remains skeptical about the sustainability of growth amid persistent structural headwinds in brick-and-mortar retail.…
M
Mk Restaurant Group
$23.38
Related headlines
M 12-Month Price Forecast
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 $22.77 and implied upside of -2.6% versus the current price.
Average Target
$22.77
0 analysts
Implied Upside
-2.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$9 - $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=strong buy, 5=strong sell). The average target price is $22.77, implying a -3.8% downside from the current price of $23.68. The consensus leans neutral to slightly bearish, reflecting skepticism about the stock's ability to sustain its rally. The target range spans from a low of $9.00 to a high of $30.00, indicating high uncertainty. The low target of $9.00 assumes a severe downturn in consumer spending or a failed turnaround, while the high target of $30.00 implies successful execution of the strategy and multiple expansion. Recent ratings from major firms (TD Cowen, Citigroup, JP Morgan) have been consistently 'hold' or 'neutral', with no upgrades or downgrades in the past quarter, suggesting analysts are in a wait-and-see mode. The wide spread between low and high targets underscores the binary nature of the investment case, with high conviction on neither side.
Bulls vs Bears: M Investment Factors
Macy's presents a classic value-versus-turnaround debate. The bull case rests on a deeply discounted valuation (8.4x P/E vs. 15x industry), strong free cash flow generation ($1.5B), and early signs of operational improvement from the Q1 beat. The bear case highlights analyst skepticism (average target $22.77, -3.8% downside), thin net margins (1.3%), and low revenue growth (2.1% YoY). Currently, the evidence slightly favors the bull case given the low valuation and cash flow strength, but the key tension is whether the turnaround can sustain momentum and drive revenue growth above 3-4% annually. If it does, the stock could re-rate toward the industry average P/E; if not, the low growth and margin pressure will keep the stock range-bound.
Bullish
- Deep Value with 8.4x Trailing P/E: Macy's trades at a trailing P/E of 8.4x, a 44% discount to the department store industry average of ~15x. This low multiple prices in significant pessimism, offering a margin of safety if the turnaround continues.
- Strong Free Cash Flow Generation: Trailing twelve-month free cash flow is $1.502 billion, representing a 27.7% free cash flow yield on the current market cap of $5.42 billion. This cash generation supports debt reduction, dividends, and reinvestment.
- Turnaround Gaining Credibility: Q1 2026 revenue grew 2.1% YoY to $4.892 billion and net income rose 66% to $63 million, beating estimates and prompting raised full-year guidance. This provides tangible evidence the strategy is working.
- Low PEG Ratio Suggests Upside: With a PEG ratio of 0.66, Macy's appears undervalued relative to its earnings growth. The forward P/E of 10.2x combined with expected EPS growth implies the stock is priced below its growth potential.
Bearish
- Analyst Consensus Hold with Downside: The average analyst target of $22.77 implies a -3.8% downside from the current price of $23.68. With 11 analysts rating it a hold and a mean recommendation of 2.92, Wall Street remains skeptical.
- Thin Net Margins Expose Vulnerability: Net margin is only 1.3% in Q1 2026, typical for department stores but leaving little room for error. A slight revenue decline or cost increase could wipe out profitability.
- Low Revenue Growth Trajectory: Revenue growth has been in the low single digits, with Q1 2026 up just 2.1% YoY. This tepid top-line performance limits the potential for significant earnings expansion and multiple re-rating.
- High Beta Amplifies Downside Risk: With a beta of 1.485, Macy's is 48.5% more volatile than the market. In a broad market downturn, the stock could fall significantly more than the S&P 500, as seen in its 29.94% max drawdown.
M Technical Analysis
Macy's stock is in a strong recovery uptrend, with a 1-year price change of +97.3%, dramatically outperforming the S&P 500's +18.4% gain. The current price of $23.68 sits at 78.4% of its 52-week range ($11.77–$26.10), indicating the stock is closer to its highs but not yet overextended. This positioning suggests momentum is intact but approaching a key resistance zone where profit-taking could emerge. Short-term momentum shows deceleration: the 1-month change is -0.9% while the 3-month change is +21.2%, indicating a pause after a strong rally. The 1-month relative strength of -1.2% versus the S&P 500 confirms a recent loss of relative momentum, potentially signaling a consolidation phase or a temporary pullback within the broader uptrend. The stock's beta of 1.485 implies 48.5% more volatility than the market, amplifying both upside and downside moves. Key support lies near the 52-week low of $11.77, while resistance is at the 52-week high of $26.10. A breakout above $26.10 would signal a continuation of the uptrend, while a breakdown below recent support near $22.00 could trigger a deeper correction toward $20.00.
Beta
1.49
1.49x market volatility
Max Drawdown
-29.9%
Largest decline past year
52-Week Range
$12-$26
Price range past year
Annual Return
+84.1%
Cumulative gain past year
| Period | M Return | S&P 500 |
|---|---|---|
| 1m | -7.7% | +0.8% |
| 3m | +16.3% | +3.5% |
| 6m | +15.1% | +7.2% |
| 1y | +84.1% | +16.5% |
| ytd | +2.8% | +8.4% |
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M Fundamental Analysis
Macy's revenue trajectory shows modest growth, with Q1 2026 revenue of $4.892 billion, up 2.1% year-over-year, following a pattern of low single-digit growth over the past four quarters. The revenue mix is heavily weighted toward women's apparel, accessories, shoes, cosmetics, and fragrances, which constituted 64% of 2025 net retail sales. While the top-line growth is tepid, the company's ability to generate positive comparable sales in a challenging retail environment is a positive sign for the turnaround narrative. Profitability has improved markedly: Q1 2026 net income was $63 million, up from $38 million in the year-ago quarter, and gross margin expanded to 41.5% from 41.7% (roughly stable). Operating margin improved to 1.6% from 2.0% in Q1 2025, reflecting cost discipline. However, net margin remains thin at 1.3%, typical for the department store industry. The balance sheet shows manageable leverage with a debt-to-equity ratio of 1.07 and a current ratio of 1.49, indicating adequate liquidity. Free cash flow generation is strong at $1.502 billion on a trailing twelve-month basis, providing ample capacity for debt reduction, dividends, and reinvestment. Return on equity of 13.2% is solid for the sector, suggesting efficient capital allocation.
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 Macy's positive net income, the primary valuation metric is the P/E ratio. The trailing P/E stands at 8.4x, while the forward P/E is 10.2x, implying the market expects earnings to decline slightly or that the current earnings are elevated. The gap between trailing and forward P/E suggests cautious optimism, as the forward multiple is higher but still low in absolute terms. Compared to the industry average (department stores), Macy's P/E of 8.4x is at a significant discount; the industry average is approximately 15x, representing a 44% discount. This discount is justified by Macy's low revenue growth and thin margins relative to higher-growth retailers, but it also reflects the market's skepticism about the turnaround's durability. Historically, Macy's trailing P/E has ranged from 2.6x to 118.6x over the past five years, with the current 8.4x near the lower end of that range. This suggests the stock is priced for a pessimistic scenario, offering potential upside if the turnaround gains further traction. The P/S ratio of 0.24x is also near historical lows, reinforcing the value proposition.
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 & Operational Risks: Macy's carries a debt-to-equity ratio of 1.07, which is manageable but not negligible. The thin net margin of 1.3% means that even a small decline in revenue or increase in costs could lead to losses. Revenue concentration is a risk, as women's apparel, accessories, shoes, cosmetics, and fragrances constitute 64% of sales, making the company vulnerable to shifts in consumer preferences in those categories. Free cash flow is strong at $1.5B, but the payout ratio of 30.7% and dividend yield of 3.6% consume a portion of that cash, limiting flexibility.
Market & Competitive Risks: Macy's faces intense competition from off-price retailers like TJX and e-commerce giants like Amazon, which have been gaining market share. The stock's beta of 1.485 indicates high sensitivity to macroeconomic conditions; a recession could severely impact discretionary spending. Valuation compression is a risk if the market re-rates department stores lower, though the current P/E of 8.4x is already near historical lows. Recent news highlights persistent Wall Street skepticism, with no analyst upgrades in the past quarter, suggesting limited near-term catalyst for multiple expansion.
Worst-Case Scenario: In a severe recession or failed turnaround, Macy's could see revenue decline 5-10% and margins compress further, leading to earnings per share falling to $1.00 or less. Applying a 7x P/E (below historical lows) yields a target of $7.00, while the analyst low target is $9.00. From the current price of $23.68, this implies a potential loss of 62% to $9.00, or 70% to $7.00. The 52-week low of $11.77 represents a 50% decline from current levels, which is a more moderate but still severe downside scenario.