Macy's Gears Up For Q2 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts

Macy's (M) is anticipated to report a significant year-over-year decline in Q4 earnings and revenue on September 3rd, with analysts forecasting EPS of $0.19 (down from $0.53) and revenue of $4.7 billion (down from $4.94 billion). Despite these lowered expectations, the stock closed up 2% on Tuesday, and the company recently declared an $0.1824 quarterly dividend. Analyst sentiment remains largely neutral, with varied price targets ranging from $12 to $16 and some recent downgrades, reflecting a cautious outlook for the retailer.

Analysis

Macy's (M) is approaching its fourth-quarter earnings release on September 3 with expectations set for a significant year-over-year contraction. Analyst consensus projects quarterly earnings of $0.19 per share, a steep decline from $0.53 in the prior-year period, alongside a revenue drop to $4.7 billion from $4.94 billion. Despite this negative outlook, which is reflected in a moderately negative sentiment score (-0.4), the stock recently rose 2% to $13.49, and the company affirmed its commitment to capital returns by declaring a regular quarterly dividend of $0.1824 per share. The sentiment from top-rated analysts is predominantly neutral, with Telsey Advisory Group, JP Morgan, and Citigroup holding 'Market Perform' or 'Neutral' ratings. This cautious stance is reinforced by a recent downgrade from Goldman Sachs (Buy to Neutral) and a price target cut by Morgan Stanley. However, recent price target increases from JP Morgan (to $16) and Citigroup (to $12) indicate some divergence in opinion, with the current stock price trading within this $12-$16 analyst target range.

Key Decisions for Investors

• Investors should monitor the upcoming earnings report on September 3 closely, as any performance better than the deeply negative consensus estimates of $0.19 EPS and $4.7 billion revenue could serve as a significant positive catalyst.
• Given the mixed analyst actions, including a recent price target increase to $16 by JP Morgan and a prior downgrade by Goldman Sachs, it is prudent to treat the prevailing neutral consensus as indicative of high uncertainty surrounding the retailer's near-term performance.
• The sustained quarterly dividend of $0.1824 is a positive signal for income-focused investors, but its sustainability should be weighed against the projected 64% year-over-year decline in quarterly earnings.