Trade Idea – Macy’s

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On 9 January 2017 long position opened in Macy’s at USD 30.52.

The share price of Macy’s – one of the biggest retailer in the US and has appr. USD 10 bn market cap – decreased significantly after the CEO anticipated that sales values would be stronger (especially the watches and handbags segments delivered weak results). The envisaged OPEX cut initiatives are expected to result in more than half billion USD savings per year.

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Historical share price development of Macy’s (USD), source: Yahoo Finance

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Historical profitability metrics (mn USD), source: company reports

Key investment considerations:

  • the falling share price pushed the RSI into the oversold territory from technical perspective
  • current fundamental trends seem to be disadvantageous, however majority of the analysts maintained buy or hold recommendation in respect to the stock
  • over 4% expected dividend yield