Macy's Inc (M, Financial) has recently experienced a notable uptick in its stock performance, with a market capitalization now standing at $5.61 billion. The current price of the stock is $20.45, reflecting a 5.96% gain over the past week and a significant 17.99% gain over the past three months. When compared to the GF Value of $20.74, Macy's is currently considered fairly valued, a shift from its previous status of being modestly undervalued when the GF Value was at $20.63. This change in valuation suggests that the stock is now trading closer to its intrinsic value as determined by GuruFocus.com.
Introduction to Macy's Inc
Macy's Inc, a stalwart in the retail - cyclical industry, has a rich history dating back to 1858. Headquartered in New York City, the company boasts a substantial presence with approximately 550 Macy's stores, nearly 60 Bloomingdale's locations, and 158 Bluemercury specialty beauty stores. Macy's also has a strong online presence and international licensing agreements. The company's product mix is diverse, with women's apparel, accessories, shoes, cosmetics, and fragrances accounting for 61% of its 2022 sales. This broad offering has helped Macy's maintain its position in a competitive retail landscape.
Assessing Macy's Profitability
Macy's Inc holds a Profitability Rank of 7 out of 10, indicating a strong ability to generate profits relative to its peers. The company's operating margin stands at 5.09%, which is better than 58.97% of 1,109 companies in the same industry. Its return on equity (ROE) is 2.53%, surpassing 39.63% of its industry counterparts. The return on assets (ROA) at 0.62% and return on invested capital (ROIC) at 8.82% also demonstrate Macy's efficiency in utilizing its assets and capital to generate earnings. These figures, coupled with nine years of profitability over the past decade, underscore Macy's solid financial foundation.
Growth Trajectory of Macy's Inc
The Growth Rank for Macy's is currently at 4 out of 10. The company has seen a 13.80% 3-year revenue growth rate per share, outperforming 74.01% of 1,035 companies in the industry. However, the 5-year revenue growth rate per share is more modest at 2.40%. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is projected at -2.61%, which, while not robust, is still better than 8.85% of the industry. The EPS without NRI growth rate for the same future period is expected to be -1.23%. These projections suggest that while Macy's has had a strong historical growth, future growth may be more challenging.
Key Shareholders in Macy's Inc
Notable investors have maintained their stakes in Macy's, demonstrating confidence in the company's prospects. David Tepper (Trades, Portfolio) is the leading shareholder with 4,450,000 shares, representing 1.62% of the company. Chuck Royce (Trades, Portfolio) holds 1,405,000 shares, accounting for 0.51%, and Steven Cohen (Trades, Portfolio) owns 1,138,267 shares, equating to 0.42%. The involvement of these prominent investors signals a level of trust in Macy's strategic direction and potential for future value creation.
Competitive Landscape
When compared to its competitors, Macy's Inc holds its own within the retail sector. Dillard's Inc (DDS, Financial) has a slightly higher market cap of $6.71 billion, while Nordstrom Inc (JWN, Financial) and Kohl's Corp (KSS, Financial) have market caps of $3.34 billion and $3.07 billion, respectively. Macy's market position is solid, sitting between these competitors, which suggests a balanced competitive environment where Macy's has the potential to leverage its strengths to gain further market share.
Conclusion
In summary, Macy's Inc's recent stock performance has been impressive, with an 18% gain over the past three months, bringing it to a fair valuation according to the GF Value. The company's profitability metrics are strong, and while growth projections are modest, Macy's has demonstrated the ability to adapt and maintain profitability in a challenging retail landscape. The confidence shown by significant shareholders and the company's competitive market position further reinforce the potential for Macy's to continue its trajectory of value creation for investors.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
