Citigroup Upgrades Macy’s to “Buy”; Says Stronger Housing Market Should Help Sales (M)
On Tuesday analysts at Citigroup upgraded department store operator Macy’s, Inc. (M), saying it is a beneficiary of an improving housing market.
The analysts upgraded M from “Neutral” to “Buy” with a price target of $46. This target suggests a 19% upside to Monday’s closing price of $38.72.
A Citi analyst commented, “We are upgrading Macy’s to Buy from Neutral as we believe the company is positioned for accelerating comp growth in 2013. Macy’s should be the beneficiary of a stronger housing market, and we see four catalysts for 2013, including: 1) the potential for double-digit sales growth in home (16% of sales mix in 2012E vs. 15% in 2011), 2) another year of 40% online sales growth, 3) Macy’s Millennial focus gains traction and brings in a new customer, and 4) RFID benefits gross margins in 2H13. Macy’s is our favorite department store stock for 2013.”
Macy’s shares were up $1.03, or +2.66%, during morning trading on Tuesday. The stock is up +10.02% over the trailing twelve months.
The Bottom Line
Shares of Macy’s have a dividend yield of 2.02% based on Thursday’s intraday trading price of $39.70 and the company’s annualized dividend payout of 80 cents per share.
Macy’s, Inc. (M) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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