Macy’s shares fall for a fourth straight session on Wednesday, quarterly earnings surge past estimates, annual earnings forecast revised up

November 15, 2018 9:48 am

Yesterday Macy’s Inc revised up its full-year earnings forecast, which was considered as an indication of a strong upcoming holiday shopping season. At the same time, the chain’s third-quarter earnings came in well above Wall Street estimates, supported by double-digit growth at its on-line shopping service.

Macy’s shares closed lower for a fourth consecutive trading session in New York on Wednesday. It has also been the steepest daily loss since August 15th. The stock went down 7.18% ($2.57) to $33.22, after touching an intraday low at $33.00, or a price level not seen since October 29th ($32.73).

Shares of Macy’s Inc have surged 31.88% so far in 2018 compared with a 1.05% gain for the benchmark index, S&P 500 (SPX).

In 2017, Macy’s stock retreated 29.66%, thus, it underperformed the S&P 500, which registered a 19.42% return.

Net sales were reported to have surged 2.3% year-on-year to $5.40 billion during the third quarter ended on November 3rd, in line with market expectations.

Sales at Macy’s stores and third-party licensees, which are open for at least 12 months, grew 3.3% during the third quarter from a year earlier. In comparison, analysts on average had expected a 2.82% growth.

Macy’s said that net income attributable to shareholders had surged to $62 million during the quarter ended on November 3rd, from $30 million during the same period a year ago.

Meanwhile, earnings per share, excluding special items, were reported at $0.27 during the third quarter, which far exceeded the median analyst forecast pointing to adjusted earnings of $0.14 per share.

“We have the right merchandise, the right marketing and the right customer experiences in place to deliver a strong fourth quarter,” Jeff Gennette, Macy’s Chief Executive Officer, was quoted as saying by Reuters.

The department store chain revised up its adjusted earnings forecast for fiscal year 2018 to a range of $4.10 to $4.30 per share from a range of $3.95 to $4.15 per share, as expected previously.

According to CNN Money, the 17 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $37.00, with a high estimate of $44.00 and a low estimate of $25.00. The median estimate represents an 11.38% upside compared to the closing price of $33.22 on November 14th.

The same media also reported that 12 out of 20 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 4 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.

Weekly Pivot Levels

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

Central Pivot Point – $37.00
R1 – $38.71
R2 – $39.65
R3 – $41.36
R4 – $43.08

S1 – $36.06
S2 – $34.35
S3 – $33.41
S4 – $32.48

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