A Look At Macy's (M) Valuation As Store Closures Advance Its Bold New Chapter Plan

Macy's (M) has confirmed it will close 14 stores this year as part of its Bold New Chapter plan to shutter about 150 department stores by 2026, concentrating investment in higher performing locations.

See our latest analysis for Macy's.

The store closures sit against a mixed but improving share price picture, with a 32.78% 90 day share price return and 53.36% 1 year total shareholder return suggesting momentum has been building recently.

If Macy's footprint rethink has you reassessing retail, it could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership.

With Macy's trading at $23.17, sitting at a reported 19% intrinsic discount but slightly above the average analyst target, you have to ask whether this is still a value story or if the market is already pricing in future growth.

Most Popular Narrative: 6.3% Overvalued

Compared with Macy's last close at US$23.17, the most followed narrative pegs fair value at US$21.80, suggesting the current price sits a little ahead of that view.

Ongoing modernization efforts, including end-to-end operational automation and technology upgrades, are expected to drive continued SG&A savings and supply chain efficiencies. These are seen as supporting stronger adjusted EBITDA and longer-term margin expansion as the company seeks to capitalize on the need for seamless, tech-enabled retail experiences.

Read the complete narrative.

Curious what kind of margin lift and earnings profile this assumes, especially with revenue contraction baked in and a lower future P/E than peers? The full narrative explains how a shrinking top line, buybacks and a tighter cost base are combined to justify that fair value.

Result: Fair Value of $21.80 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative leans on higher margins and steady omni channel execution at a time when e commerce pressure and softer in store demand could challenge both.

Find out about the key risks to this Macy's narrative.

Another View: Multiples Point To Value

While the popular narrative says Macy's is about 6.3% overvalued at US$21.80 per share, the simpler P/E snapshot tells a different story. At 12.9x earnings versus 23.3x for peers, and a fair ratio of 15.9x, the current pricing looks more like a discount than excess optimism. Which signal do you trust more?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Macy's Narrative

If the assumptions here do not quite line up with your own view, you can test the data yourself and build a custom thesis in minutes with Do it your way.

A great starting point for your Macy's research is our analysis highlighting 4 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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