Jefferies Upgrades Macy's (M) to Buy; Sees More Optionality in Shares

December 18, 2020 4:18 AM EST
Get Alerts M Hot Sheet
Price: $18.78 +0.70%

Rating Summary:
    8 Buy, 14 Hold, 10 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 9 | New: 25
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(Updated - December 18, 2020 8:34 AM EST)

(updated to add analyst comments)

Jefferies analyst Randal Konik upgraded Macy's (NYSE: M) from Hold to Buy with a price target of $14 (from $9), saying they see more optionally that they previously thought.

Konik commented, "In higher GDP expectations for 2021 on discretionary (apparel) spend, we are transferring coverage & upgrading to Buy. We do not expect a recovery to 2019 sales &EBITDA as consumer behavior has forever changed. But we don't see Macy's suffering permanent losses to the magnitude assumed. Big changes are needed to reinvigorate quality sales, but low-capital options exist, esp as a platform for a new class of wholesale brands. We raise our PT from $9 to $14."

The analyst highlighted:

  • Upside To Estimates
  • Estimates Appear Too Low For Rational Recovery
  • COVID Is Not The Death Knell
  • New Class of Brands To Backfill Departing Incumbents
  • Debt Deleverage Directly Accretes to Equity Value

For an analyst ratings summary and ratings history on Macy's click here. For more ratings news on Macy's click here.

Shares of Macy's closed at $10.42 yesterday.

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