Macy's Gets Upgraded By Goldman Sachs

02:47 05/19/2019

Department store chain Macy's Inc. M  has received an upgrade from investment banking firm Goldman Sachs this month, which is impressive as the firm had lowered their rating just a few months ago.

According to Goldman's previous remarks, Macy's turn around plans were 'insufficient,' which makes this new upgrade promising.

Goldman Sachs analyst Alexandra Walvis has upgrade shares of Macy's from 'sell' to 'neutral' and cited that Macy's first-quarter results showed a more balanced risk/reward in the wake of significant share underperformance.

It was last September that Goldman had downgraded shares to 'sell' and shares had fallen 41% since then.

'M has also pursued a more aggressive roll-out of new initiatives to drive traffic and customer acquisition, which, while encouraging, have come with a step-up in necessary investments,' Walvis wrote to investors. 'While we continue to believe M will see fading fundamentals in the medium term as secular challenges weigh, we see near term risk/reward as less skewed to the downside following underperformance.'

It was also last week that Macy's reported first quarter financial results and beat expectations.

On a reported basis, net income fell 2% to $136 million, or $0.44 per share, compared to the year-ago quarter. Adjusted net income fell 8% year-over-year to $137 million, or $0.44 per share.

Asset sale gains totaled $43 million pre-tax, or $31 million after-tax and $0.10 per share. This compares to asset sale gains of $24 million pre-tax, or $18 million after-tax and $0.06 per share in the prior-year quarter.

Macy's is now expecting net sales to be approx. flat compared with last year.

Comparable sales are expected to be flat to up 1%, both on an owned basis, and on an owned plus licensed basis. Adjusted EPS is forecasted in the range of 3.05 to $3.25.

This was the sixth straight quarter of an increase in comporable sales for the retailer.

“Our brick & mortar sales trend improved sequentially in the first quarter, supported by the Growth50 stores and Backstage. We had another quarter of double-digit growth in our digital business, and mobile continues to be our fastest-growing channel,” said Jeff Gennette, Macy’s, Inc. Chairman and Chief Executive Officer.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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