#7 - Macy’s (NYSE:M)
The last stock on our list of retail stocks to buy is Macy’s (NYSE:M). The retailer posted unquestionably strong earnings in its fourth-quarter earnings report. Some of the highlights included a year-over-year sales increase of 28% and a whopping increase of nearly $500 million in adjusted net income at $745 million which calculates to $2.45 per diluted share. The company also ended the quarter and year in a strong cash position.
One question for Macy’s was whether they could grow digital sales. The company was late to adapt, but they are showing growth in that area. The big question now is if they can repeat that success in upcoming quarters. Revenue is expected to be flat in 2022.
And that may be reflected in the sentiment of institutional buyers. Although buyers have outnumbered sellers, the bearish sentiment appears to be a bit stronger. However, the company is sporting a P/E ratio of 5.16 which makes it a bit undervalued relative to the sector.
About Macy's
Macy's, Inc, an omni-channel retail organization, operates stores, websites, and mobile applications in the United States. The company sells a range of merchandise, such as apparel and accessories for men, women, and kids; cosmetics; home furnishings; and other consumer goods under the Macy's, Bloomingdale's, and bluemercury brands.
Read More - Current Price
- $16.30
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $20.43 (25.3% Upside)
The retail sector still faces some unknowns. Inflation is expected to dampen some consumer appetites. And that slowing may have started to be reflected in February retail sales. The 0.3% growth in sales was a marked slowdown from January's 4.9% growth.
However, any consumer hesitancy may be offset by a desire to travel and re-engage with activities that were largely curtailed the last couple of summers. With that as your guide, not every company will do well. But if you have a plan, there are several stocks that are expected to outperform the rest of the sector.
If you want exposure to the retail sector, but don't want to buy individual stocks, there are a few quality retail sector ETFs. Some of the names that investors can look for include the SPDR S&P Retail ETF (NYSEARCA:XRT), the Amplify Online Retail ETF (NYSEARCA:IBUY) and the ProShares Online Retail ETF (NYSEARCA:ONLN).
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