M - Macy's is added to Goldman Sachs' Conviction Buy list ahead of earnings

2023-08-01 13:11:42 ET

Macy's ( NYSE: M ) was added on Tuesday to the Conviction Buy List at Goldman Sachs for August. The firm is looking for the department store operator to execute on its five pillar growth strategy after successfully completing "trial and learn phases" this year.

Analyst Brooke Roach pointed to Macy's ( M ) new idiosyncratic initiatives, and expects strengthening execution and improving inventory management to drive market share capture, growth, and profitability.

Roach expects the pivot to small format off-mall stores will be a key opportunity for Macy's ( M ) to capture market share and benefit from higher levels of off-mall traffic. Another key point laid out was that Macy's ( M ) remains focused on returning private brands to growth at attractive margins. In terms of the balance sheet, Roach sees significant opportunity for cash returns to shareholders with no near-term maturities to consider. The general view is that Macy's ( M ) solid free cash generation generation and unlevered/unsecured asset base is underappreciated.

Goldman Sachs assigned a 12-month price target on Macy's ( M ) of $23, based on a sum-of-the-parts methodology that assigned a $1.10 per share value to M’s real estate portfolio.

Shares of Macy's ( M ) traded down 1.57% in early afternoon trading. Macy's ( M ) is expected to report earnings sometime during the third week of August. The last 13 EPS revisions on Macy's ( M ) have all been to the downward side.

More on Macy's:

• Macy's: Business As Usual
• Valuation metrics on Macy's
• Relative strength index and moving averages
• Recent option trades

For further details see: