“Macy’s, Inc. (M – yield 2.20%) operates about 850 department stores under its namesake or Bloomingdale’s brands. During the holiday season (combining November and December) same-store sales climbed 5.7%, while online sales jumped 40%. As a result, the retailer raised its guidance for the January quarter. Also in January, Macy’s doubled its quarterly dividend to $0.20 per share, payable April 2. The shares have advanced 5% so far this year but trade at just 12 times trailing earnings, at least 21% below their own five-year average and the median for department-store stocks in the S&P 1500 Index.
“Macy’s shares seem capable of reaching $42 over the next year. Scoring at least 88 in both of our sector-specific ranks, Macy’s is being initiated as a Buy and a Long-Term Buy.”
Richard J. Moroney, CFA, Dow Theory Forecasts, 2/6/12
Second Opinion: Macy’s
“Macy’s maintains a very strong price uptrend off the late 2008 low. The chart exhibits higher highs and higher lows. Generally pull-backs are buying opportunities as reassertions soon follow. The P&F relative chart versus the S&P 500 also shows a primary uptrend off the 2008 low. Action this month has seen a small relative correction but the uptrend is still underway and a visit to the relative highs from 2007 looks likely in the months ahead. ... Only a break beneath $24 would put the long- term uptrend under threat.”
Michael Burke and John Gray, Investors Intelligence, 1/31/12
