Macy's (M) Looks Fully Valued Following Its New Fall Fashion Campaign
Macy's (M) just rolled out its fall Find Us At Macy's campaign, pairing iconic and emerging designers in exclusive capsule collections that only appear in its stores and online. Investors are watching how this branding push shapes shopper interest.
Macy's share price closed at US$23.05, with a 1-day share price return of 2.58% and a 7-day share price return of 5.11%. This hints that the latest campaign and the recent dividend affirmation are feeding into short term momentum, even as the 30-day share price return is down 9.25%.
Over a longer horizon, the picture looks different. A modest year to date share price return of 1.32% sits alongside a 1-year total shareholder return of 39.01% and a 3-year total shareholder return of about 13x. This signals that investors have already reacted strongly to earlier shifts in the Macy's story.
Scan beyond Macy's and see how other retailers with strong fundamentals are moving right now by checking the hand picked 49 high quality undervalued stocks that may be setting up their next leg of momentum.
The recent lift in Macy's share price can read as either a vote of confidence in a steady underlying retailer or a quick re rate driven by mood around campaigns and dividends. Which story does the current valuation tell?
Most Popular Narrative: 1% Overvalued
The most followed valuation narrative for Macy's pegs fair value at about $22.77, slightly below the last close at $23.05, which leaves almost no gap for mispricing.
Investments in enhancing the omni-channel shopping experience, including improvements in digital, BOPIS, and store service, are leading to rising customer satisfaction and sustained sales growth, which should directly benefit revenue and potentially expand net margins over time through stronger customer loyalty and higher average order values.
Want to see what underpins that near head to head fair value against Macy's share price? The narrative leans on changing revenue trends, margin tweaks, and a future earnings multiple that needs to stretch just enough to bridge the gap.
Result: Fair Value of $22.77 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
Still, the story frays quickly if store closures bite harder than expected or if e-commerce rivals pull more spending away from Macy's core customer base.
Find out about the key risks to this Macy's narrative.
Another View: Macy's Valuation Through The P/E Lens
The DCF driven fair value of $22.77 paints Macy's as slightly overvalued, yet the current P/E of 9.1x looks low next to both the global Multiline Retail industry at 19.9x and peers at 13.8x. The fair ratio of 12.5x also sits well above today. Is the market overpricing risk or underpricing staying power?
For a closer look at how this earnings multiple stacks up and what it could mean if the P/E drifts toward that fair ratio, take a look at See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Mixed messages in Macy's story so far? Take a moment to weigh the upside against the concerns, and then test that view against the 3 key rewards and 1 important warning sign.
Looking For More Ideas Beyond Macy's?
Do not stop with Macy's when there are plenty of other opportunities worth putting on your radar using the Simply Wall St Screener.
- Hunt for quality at a discount by scanning the 49 high quality undervalued stocks that already combine stronger balance sheets with appealing valuations.
- Build a steadier income stream by checking the 6 dividend fortresses that pair higher yields with underlying fundamentals you can actually analyse.
- Sleep a bit easier by focusing on resilience first and sorting through the 83 resilient stocks with low risk scores before enthusiasm moves on to the next theme.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com