Macy’s shares close lower on Thursday as Morgan Stanley downgrades the stock to “Underweight”, cuts price target

Shares of Macy’s Inc (M) retreated over 2% during the trading session in New York yesterday, after Morgan Stanley downgraded the stock to “Underweight” from “Equal-weight” previously. The bank expects that Macys earnings per share will probably fall short of market expectations during the current fiscal year, as the company faces shrinking sales at its physical stores as well as fierce competition from on-line retailers.

Macy’s shares closed lower for the fourth time in the past seven trading sessions on Thursday. It has also been the steepest daily loss since May 7th. The stock went down 2.39% ($0.72) to $29.42, after touching an intraday low at $28.31, or a price level not seen since April 13th ($27.94).

In the week ended on May 6th the shares of the department store chain lost 2.95% of their market value compared to a week ago, which marked the second drop out of six weeks.

The stock has extended its loss to 5.31% so far during the current month, following a 4.47% surge in April. The latter has been a sixth straight month of gains.

For the entire past year, the shares of Macy’s Inc went down 29.66%, following a 2.37% surge in 2016.

“Macys continues to undergo core operating challenges, similar to peers in the department store space. Despite closing stores proactively, store-only comps remain negative and we forecast them to remain so in the future”, Morgan Stanley analyst Kimberly Greenberger wrote in a client note on Thursday, cited by CNBC.

“Expense cuts, real estate monetization, and secondary growth initiatives are encouraging, but we think the market needs to see core retail EBIT stabilization and a return to strong cash flow generation in order to become more constructive on the stock”, the analyst also noted.

According to Greenbergers forecast, Macys will probably earn $3.55 per share during fiscal year 2019. The latter compares with a median analyst estimate of $3.61 per share.

The analyst also revised down her price target on the companys stock to $25 from $27 previously.

According to CNN Money, the 17 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $31.00, with a high estimate of $36.00 and a low estimate of $21.00. The median estimate is a 5.37% surge compared to the closing price of $29.42 on May 10th.

The same media also reported that 12 out of 20 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 3 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Macy’s stock are presented as follows:

R1 – $29.54
R2 – $29.65
R3 (Range Resistance – Sell) – $29.77
R4 (Long Breakout) – $30.11
R5 (Breakout Target 1) – $30.52
R6 (Breakout Target 2) – $30.73

S1 – $29.30
S2 – $29.19
S3 (Range Support – Buy) – $29.07
S4 (Short Breakout) – $28.73
S5 (Breakout Target 1) – $28.32
S6 (Breakout Target 2) – $28.11

By using the traditional method of calculation, the weekly levels of importance for Macy’s Inc (M) are presented as follows:

Central Pivot Point – $31.25
R1 – $32.37
R2 – $33.50
R3 – $34.62
R4 – $35.74

S1 – $30.12
S2 – $29.00
S3 – $27.87
S4 – $26.74