Mk Restaurant Group
M
$23.22
-0.81%
Macy's Inc. is a leading American department store chain operating approximately 430 Macy's stores, 60 Bloomingdale's locations, and 170 Bluemercury beauty stores, alongside a robust e-commerce presence. As a legacy retail giant, it holds a significant market position in the department store industry, competing with other national chains and online retailers. The current investor narrative centers on Macy's turnaround strategy, which gained credibility following a broad-based Q1 2026 earnings beat and an upward revision to full-year guidance, though Wall Street remains skeptical about the sustainability of this recovery amid a challenging consumer environment.…
M
Mk Restaurant Group
$23.22
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Investment Opinion: Should I buy M Today?
Based on the analysis, I rate Macy's as a Hold. The stock offers a compelling valuation with a trailing PE of 8.45x and a PEG of 0.66, but the average analyst target of $22.77 is below the current price, suggesting limited upside. The Q1 beat and raised guidance are positive, yet the market remains skeptical, as reflected in the consensus 'none' rating. For investors seeking value and income, Macy's could be a reasonable addition, but the lack of clear catalysts and high debt warrant caution.
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M 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk-reward profile. Macy's offers a compelling valuation and strong cash generation, but its growth prospects are limited, and the stock is highly sensitive to market conditions. The recent Q1 beat is encouraging, but sustainability remains uncertain. If the company can consistently exceed expectations and demonstrate margin expansion, the stance would upgrade to bullish. Conversely, any signs of deteriorating fundamentals or a dividend cut would warrant a bearish stance. The key is to monitor quarterly earnings and consumer spending trends closely.
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 -1.9% versus the current price.
Average Target
$22.77
0 analysts
Implied Upside
-1.9%
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 'none' (likely a mix of Hold and Neutral ratings). The average target price is $22.77, which is 2.7% below the current price of $23.41, implying a slight downside. The target range spans from a low of $9.00 to a high of $30.00, indicating significant uncertainty about the stock's future. The low target suggests a scenario of continued operational struggles and potential dividend cuts, while the high target reflects optimism about the turnaround's success and margin expansion. Recent ratings from major firms like JP Morgan, Citigroup, and TD Cowen have all been Neutral or Hold, indicating a cautious stance among analysts.
Bulls vs Bears: M Investment Factors
Macy's presents a compelling value opportunity with a low PE, strong free cash flow, and a credible turnaround narrative, as evidenced by the Q1 beat and raised guidance. However, the stock faces significant headwinds: analyst targets suggest limited upside, debt levels are elevated, and revenue growth remains modest. The bull case is supported by valuation and operational improvements, while the bear case hinges on skepticism about long-term growth and potential macro pressures. The most critical tension is whether the recent earnings beat marks a sustainable inflection point or a temporary boost; if the turnaround continues, the stock could re-rate higher, but any setback could trigger a sharp correction toward the 52-week low.
Bullish
- Strong 1-Year Momentum: Macy's stock has surged 80.63% over the past year, vastly outperforming the S&P 500's 20.37% gain. This reflects growing investor confidence in the company's turnaround strategy and improving operational performance.
- Attractive Valuation Metrics: With a trailing PE of 8.45x and a PEG ratio of 0.66, Macy's trades at a significant discount to the broader market. The low PEG suggests the stock is undervalued relative to its expected earnings growth, offering a compelling value proposition.
- Q1 Beat and Raised Guidance: Macy's delivered a broad-based Q1 2026 earnings beat, with revenue of $4.892 billion (up 2.07% YoY) and EPS of $0.24, surpassing expectations. The company also raised its full-year guidance, signaling management's confidence in sustained recovery.
- Healthy Free Cash Flow: Macy's generates robust free cash flow of $1.502 billion (TTM), providing ample liquidity for debt reduction, dividends, and strategic investments. This financial flexibility supports the turnaround and shareholder returns.
Bearish
- Analyst Targets Below Current Price: The average analyst target price of $22.77 is 2.7% below the current price of $23.41, implying limited upside or potential downside. The low target of $9.00 highlights significant bearish scenarios, reflecting skepticism about the turnaround's durability.
- High Debt-to-Equity Ratio: Macy's debt-to-equity ratio stands at 1.07, indicating a leveraged balance sheet. Elevated debt levels increase financial risk, especially if consumer spending weakens or interest rates remain high, potentially constraining growth initiatives.
- Modest Revenue Growth: Q1 2026 revenue growth was only 2.07% YoY, reflecting a mature business with limited expansion prospects. This slow growth may not justify the stock's recent rally, especially if the market expects acceleration that fails to materialize.
- High Beta and Volatility: With a beta of 1.45, Macy's is 45% more volatile than the market, amplifying downside risk during market downturns. The stock's 1-month relative strength of -4.32% indicates recent underperformance, suggesting momentum may be fading.
M Technical Analysis
Macy's stock has demonstrated a robust recovery over the past year, with a 1-year price change of +80.63%, significantly outperforming the S&P 500's +20.37% gain. The current price of $23.41 sits at 88% of its 52-week range (low of $12.65, high of $26.59), indicating the stock is trading near its highs, which suggests strong momentum but also potential overextension. The stock's beta of 1.45 implies it is 45% more volatile than the market, amplifying both upside and downside moves.
Beta
1.45
1.45x market volatility
Max Drawdown
-29.9%
Largest decline past year
52-Week Range
$13-$27
Price range past year
Annual Return
+81.3%
Cumulative gain past year
| Period | M Return | S&P 500 |
|---|---|---|
| 1m | -1.9% | +4.0% |
| 3m | +21.9% | +5.3% |
| 6m | +2.0% | +12.6% |
| 1y | +81.3% | +20.1% |
| ytd | +2.1% | +13.3% |
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M Fundamental Analysis
Macy's revenue trajectory shows modest growth, with the most recent quarter (Q1 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 but generally stable top line. The company's growth is driven by its credit card revenues ($172 million) and Macy's Media Network ($38 million), while core merchandise segments like Women's Apparel ($1.142 billion) and Men's and Kids ($965 million) remain substantial contributors. The modest growth rate suggests a mature business, but the recent beat and guidance raise suggest potential for acceleration.
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 net income of $63 million in Q1 2026, the PE ratio is the primary valuation metric. The trailing PE is 8.45x, while the forward PE is 10.05x, indicating that the market expects earnings to decline slightly over the next year. This gap suggests modest growth expectations, which is consistent with the company's low single-digit revenue growth. The PEG ratio of 0.66x implies that the stock is undervalued relative to its expected earnings growth, making it an attractive 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 risks are notable: Macy's carries a debt-to-equity ratio of 1.07, indicating substantial leverage that could strain cash flows if sales decline or interest costs rise. The company's net margin is thin at 2.84% (Q1 2026), leaving little room for error, and its operating margin of 4.55% is below industry averages, highlighting operational inefficiencies. While free cash flow is strong at $1.5 billion, a significant portion may be needed for debt servicing, limiting flexibility for growth investments or dividend increases. Additionally, the payout ratio of 30.7% suggests dividend sustainability, but any earnings shortfall could force a cut, which would likely trigger a sell-off.