Macy’s shares hit a two-week low on Monday, stock downgraded to “Sell” at Goldman Sachs

Goldman Sachs on Monday revised down its rating on Macy’s Inc (M) from “Neutral” to “Sell”, after the department store operator cut its full-year comparable sales and adjusted earnings forecasts.

Goldman also cited “significant additional downside” to Macy’s operations, which could hamper its ability to reduce costs. The bank slashed its 12-month price target on the stock from $17 to $12.

Macy’s shares closed higher for a third consecutive trading session in New York on Monday. It has also been the sharpest daily surge since November 22nd. The stock went up 2.18% ($0.33) to $15.48, after touching an intraday low at $14.81, or a price level not seen since November 22nd ($14.58).

Shares of Macy’s Inc have retreated 48.02% so far in 2019 compared with a 25.10% gain for the benchmark index, S&P 500 (SPX).

In 2018, Macy’s stock went up 18.22%, thus, it outperformed the S&P 500, which registered a 6.24% loss.

Last month, Macy’s said comparable sales had dropped 3.9% year-on-year on an owned basis and 3.5% on an owned plus licensed basis during the third quarter ended on November 2nd. Analysts on average had expected a 1% drop in same-store sales.

The company said it now expected a drop between 1% and 1.5% in full-year total comparable sales, after previously projecting zero to 1% growth.

Meanwhile, adjusted net income attributable to shareholders was reported to have decreased to $21 million ($0.07 per share) during the latest quarter from $83 million ($0.27 per share) in the year-ago period.

The department store operator also noted it now expected full-year adjusted earnings within the range of $2.57 per share to $2.77 per share, or a revision down from a previously expected range of $2.85 per share to $3.05 per share.

Analyst stock price forecast and recommendation

According to CNN Money, the 13 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $15.00, with a high estimate of $22.00 and a low estimate of $12.00. The median estimate represents a 3.10% downside compared to the closing price of $15.48 on December 9th.

The same media also reported that at least 7 out of 16 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 2 – as “Buy”. On the other hand, 5 analysts had recommended selling the stock.