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Is Macy's Stock a Buy or Sell at Its Current Valuation?
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Key Takeaways
M trades at a 9.89X forward P/E, well below peers, despite outperforming the industry over the past month.
Upward EPS revisions reflect momentum as Macy's raises sales and profit outlooks on improving trends.
Luxury brands, store upgrades and supply-chain automation are driving improved engagement and efficiency.
Macy's, Inc. (M - Free Report) is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 9.89X, which positions it at a discount compared with the Zacks Retail - Regional Department Stores industry's average of 15.65X. The key issue for investors is whether this discounted valuation reflects underlying business challenges or presents a buying opportunity.
M’s Valuation Snapshot
Image Source: Zacks Investment Research
This valuation is especially notable when compared with peers such as Dillard’s, Inc. (DDS - Free Report) , with a forward 12-month P/E of 22.60, Kohl’s Corporation (KSS - Free Report) , with 15.88, and Costco Wholesale Corporation (COST - Free Report) , with 45.33.
Despite the recent price appreciation, Macy’s stock continues to trade at a meaningful discount to the broader industry. M shares have gained 22.9% over the past month, outperforming the industry’s growth of 18%. The stock has also outpaced the Retail-Wholesale sector and the S&P 500 Index’s returns of 7.1% and 5.8%, respectively, during the same period.
Macy’s Stock Past 3-Month Performance
Image Source: Zacks Investment Research
M has underperformed Kohl’s, while outperforming Dillard’s and Costco. Over the past three months, shares of Kohl’s and Dillard’s have rallied 33.4% and 16.5%, respectively, whereas Costco shares have declined 1.6%.
M’s Performance vs. Peer Performance
Image Source: Zacks Investment Research
Closing at $22.00 in yesterday’s trading session, the Macy’s stock stands 9.9% below its 52-week high of $24.41 reached on Dec. 12, 2025. M is trading above its 50 and 200-day simple moving averages of $21.73 and $15.49, respectively, indicating a favorable technical setup for the stock.
Macy’s Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Upward Estimate Revisions Signal Optimism on M’s Earnings
Reflecting positive sentiment around Macy’s, the Zacks Consensus Estimate for EPS has seen upward revisions. The consensus estimate for EPS for the current and next fiscal years has increased by 16 cents and 7 cents to $2.16 and $2.23, respectively, over the past 30 days.
Image Source: Zacks Investment Research
What’s Behind Macy’s Upward Estimate Revision?
M is moving through a pivotal phase of transformation, with leadership emphasizing how its Bold New Chapter strategy is resonating meaningfully with customers. The company’s focus on curated assortments, elevated brand variety and improved service is creating a more compelling and relevant shopping experience.
Strengthening and reimagining the Macy’s nameplate remains central to the strategy. Initiatives such as upgraded store environments, clearer product presentation, and expanded contemporary and better-tier brands are deepening customer engagement. The Reimagine 125 locations provide a model for the future, showing how thoughtful floor layouts and improved visual storytelling can elevate the entire shopping journey.
Luxury continues to serve as a major growth catalyst across Bloomingdale’s and Bluemercury. Bloomingdale’s is enhancing its aspirational positioning through exclusive designer partnerships, elevated in-store experiences and an omnichannel approach that strengthens customer loyalty. Bluemercury’s focus on dermatological skincare and prestige beauty, supported by brand additions, demonstrates the durability of the luxury segment within the portfolio.
Operational modernization is becoming a structural advantage as Macy’s sharpens efficiency across its supply chain. The new China Grove distribution center, powered by robotics, automation and AI, reflects a long-term commitment to faster fulfillment and reduced delivery complexity. This facility enables broader category support from a single location, providing both cost benefits and a more seamless customer experience.
Across the enterprise, Macy’s reinforces an omnichannel mindset that prioritizes customer choice above channel penetration. Investments in digital upgrades, personalization, improved app functionality and consistent store execution highlight a unified approach to market-by-market leadership. As the fleet is optimized and more stores transition to enhanced formats, customer retention efforts and personalized communication strengthen the company’s long-term competitive positioning.
What to Expect From M’s in the Future?
For fiscal 2025, Macy’s raised its net sales outlook to $21.48-$21.63 billion, up from the previously mentioned $21.15-$21.45 billion. The company expects comparable owned-plus-licensed-plus-marketplace sales to be flat to up 0.5% year over year versus the prior mentioned 0.5-1.5% decline.
Macy’s also upgraded expectations for its go-forward fleet, projecting comparable owned-plus-licensed-plus-marketplace sales to be flat to up 1% compared with the earlier stated 1.5% decline to flat. The company anticipates an adjusted EBITDA margin of 7.8-8% and a core adjusted EBITDA margin of 7.5-7.7%, reflecting improved operating leverage and disciplined expense management.
Additionally, M lifted its adjusted earnings per share forecast to $2.00-$2.20 from the previously stated $1.70-$2.05. The revised outlook reflects stronger visibility into performance trends and improved fundamentals heading into the balance of the fiscal year.
Strong cash generation, limited near-term debt maturities and continued share repurchases further strengthened the financial position.
How to Play Macy’s Stock?
Macy’s presents an attractive opportunity for long-term investors, trading below peer valuations while successfully advancing its Bold New Chapter strategy. Positive momentum, upward earnings revisions, and growth across luxury, digital and store initiatives highlight the company’s strong long-term prospects. While near-term risks like tariff pressures and cautious consumer spending remain, the stock’s favorable valuation and strategic progress make it a compelling buy.
Image: Bigstock
Is Macy's Stock a Buy or Sell at Its Current Valuation?
Key Takeaways
Macy's, Inc. (M - Free Report) is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 9.89X, which positions it at a discount compared with the Zacks Retail - Regional Department Stores industry's average of 15.65X. The key issue for investors is whether this discounted valuation reflects underlying business challenges or presents a buying opportunity.
M’s Valuation Snapshot
Image Source: Zacks Investment Research
This valuation is especially notable when compared with peers such as Dillard’s, Inc. (DDS - Free Report) , with a forward 12-month P/E of 22.60, Kohl’s Corporation (KSS - Free Report) , with 15.88, and Costco Wholesale Corporation (COST - Free Report) , with 45.33.
Despite the recent price appreciation, Macy’s stock continues to trade at a meaningful discount to the broader industry. M shares have gained 22.9% over the past month, outperforming the industry’s growth of 18%. The stock has also outpaced the Retail-Wholesale sector and the S&P 500 Index’s returns of 7.1% and 5.8%, respectively, during the same period.
Macy’s Stock Past 3-Month Performance
Image Source: Zacks Investment Research
M has underperformed Kohl’s, while outperforming Dillard’s and Costco. Over the past three months, shares of Kohl’s and Dillard’s have rallied 33.4% and 16.5%, respectively, whereas Costco shares have declined 1.6%.
M’s Performance vs. Peer Performance
Image Source: Zacks Investment Research
Closing at $22.00 in yesterday’s trading session, the Macy’s stock stands 9.9% below its 52-week high of $24.41 reached on Dec. 12, 2025. M is trading above its 50 and 200-day simple moving averages of $21.73 and $15.49, respectively, indicating a favorable technical setup for the stock.
Macy’s Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Upward Estimate Revisions Signal Optimism on M’s Earnings
Reflecting positive sentiment around Macy’s, the Zacks Consensus Estimate for EPS has seen upward revisions. The consensus estimate for EPS for the current and next fiscal years has increased by 16 cents and 7 cents to $2.16 and $2.23, respectively, over the past 30 days.
Image Source: Zacks Investment Research
What’s Behind Macy’s Upward Estimate Revision?
M is moving through a pivotal phase of transformation, with leadership emphasizing how its Bold New Chapter strategy is resonating meaningfully with customers. The company’s focus on curated assortments, elevated brand variety and improved service is creating a more compelling and relevant shopping experience.
Strengthening and reimagining the Macy’s nameplate remains central to the strategy. Initiatives such as upgraded store environments, clearer product presentation, and expanded contemporary and better-tier brands are deepening customer engagement. The Reimagine 125 locations provide a model for the future, showing how thoughtful floor layouts and improved visual storytelling can elevate the entire shopping journey.
Luxury continues to serve as a major growth catalyst across Bloomingdale’s and Bluemercury. Bloomingdale’s is enhancing its aspirational positioning through exclusive designer partnerships, elevated in-store experiences and an omnichannel approach that strengthens customer loyalty. Bluemercury’s focus on dermatological skincare and prestige beauty, supported by brand additions, demonstrates the durability of the luxury segment within the portfolio.
Operational modernization is becoming a structural advantage as Macy’s sharpens efficiency across its supply chain. The new China Grove distribution center, powered by robotics, automation and AI, reflects a long-term commitment to faster fulfillment and reduced delivery complexity. This facility enables broader category support from a single location, providing both cost benefits and a more seamless customer experience.
Across the enterprise, Macy’s reinforces an omnichannel mindset that prioritizes customer choice above channel penetration. Investments in digital upgrades, personalization, improved app functionality and consistent store execution highlight a unified approach to market-by-market leadership. As the fleet is optimized and more stores transition to enhanced formats, customer retention efforts and personalized communication strengthen the company’s long-term competitive positioning.
What to Expect From M’s in the Future?
For fiscal 2025, Macy’s raised its net sales outlook to $21.48-$21.63 billion, up from the previously mentioned $21.15-$21.45 billion. The company expects comparable owned-plus-licensed-plus-marketplace sales to be flat to up 0.5% year over year versus the prior mentioned 0.5-1.5% decline.
Macy’s also upgraded expectations for its go-forward fleet, projecting comparable owned-plus-licensed-plus-marketplace sales to be flat to up 1% compared with the earlier stated 1.5% decline to flat. The company anticipates an adjusted EBITDA margin of 7.8-8% and a core adjusted EBITDA margin of 7.5-7.7%, reflecting improved operating leverage and disciplined expense management.
Additionally, M lifted its adjusted earnings per share forecast to $2.00-$2.20 from the previously stated $1.70-$2.05. The revised outlook reflects stronger visibility into performance trends and improved fundamentals heading into the balance of the fiscal year.
Strong cash generation, limited near-term debt maturities and continued share repurchases further strengthened the financial position.
How to Play Macy’s Stock?
Macy’s presents an attractive opportunity for long-term investors, trading below peer valuations while successfully advancing its Bold New Chapter strategy. Positive momentum, upward earnings revisions, and growth across luxury, digital and store initiatives highlight the company’s strong long-term prospects. While near-term risks like tariff pressures and cautious consumer spending remain, the stock’s favorable valuation and strategic progress make it a compelling buy.
At present, Macy’s flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.