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- 👜 Could Macy's Make a Comeback?
👜 Could Macy's Make a Comeback?
Plus, gas prices are expected to drop this Labor Day weekend!
Happy Friday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟩 | US stocks rose on Friday. The S&P 500 rose 1%, the Nasdaq Composite increased 1%, and the Dow Jones gained 0.6%, as investors aimed to conclude a volatile month positively while closely monitoring key inflation data watched by the Fed
📈 | One Notable Gainer: Chipmaker Intel’s shares jumped 9% on news that its working with bankers to explore options to address weaknesses in its core business.
📉 | One Notable Decliner: Ulta Beauty’s stock dropped over 4% after missing earnings for the first time in four years and lowering its full-year guidance due to a decline in same-store sales.
👜 | Tomorrow's Trade: Could Macy's Make a Comeback? Scroll down for more.
Plus, trying to figure out how to trade this crazy election year? Today’s partner says just focus on these 5 stocks…
And, a quick programming note. The Street Sheet team will be grilling and chilling on Labor Day, so there will be no newsletter on Monday. Our regular schedule will resume on Tuesday, 9/3. Enjoy the holiday weekend!
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
BABA (+3%) Alibaba Wins Beijing’s Approval, Ending Years-Long Scrutiny (Bloomberg)
MRVL (+9%) Marvell Turns Corner on AI Chip Demand. Its Earnings are Positive for Broadcom. (Barron’s)
DELL (+4%) Dell Rises on Revenue Beat Fueled By Demand for AI Servers (Bloomberg)
ALNY (-8%) Alnylam Stock Falls on Positive but Disappointing Study Results for Heart Drug (WSJ)
MDB (+18%) MongoDB Stock Trims Loss for the Year. The Company Has ‘Turned the Corner.’ (Barron’s)
TOGETHER WITH STOCKEARNINGS.COM
Now available – a free report that reveals 5 election year stocks poised to reward investors (no matter who wins in November).
OVERHEARD ON THE STREET
Bloomberg: Adam Meyers, senior VP at Crowdstrike, will testify before Congress on September 24 about the company’s July IT outage.
Reuters: RTX Corp will pay $200 million for mishandling defense exports and data with banned countries, including China.
TechCrunch: Nvidia and Apple are reportedly negotiating to invest in OpenAI's next funding round, potentially valuing the maker of ChatGPT at $100 billion.
The Wrap: Disney and DirecTV are rushing to finalize a deal and avoid a blackout before their current agreement expires on Sunday..
Reuters: Lithium Americas announced that GM will delay a $330M investment until year-end, part of a $650M commitment for Thacker Pass.
TOMORROW’S TRADE IDEA, TODAY
There Might Be More to Macy’s Than Meets the Eye
Buying Back In
Macy’s (M) stock has been far from a winner over the last few years. Investors who bought Macy’s shares a decade ago would have lost around 75% of their value.
This has been especially true in recent months. The latest batch of retail earnings has largely shown increasingly cost-conscious consumers abandoning mid- to high-end stores for their discount counterparts. Macy’s shares shed sharply following the company’s latest earnings.
However, with new leadership in place and a low valuation, it may finally be time for investors to buy back into the storied retailer. New CEO Tony Spring’s plan to close unproductive stores, spruce up the others, and open more high-end locations could kickstart a department store that has been bleeding market share.
Making Changes
Unlike Macy’s previous leaders, Spring seems to have his finger on the pulse of consumer preferences. For instance, on earnings calls, he is able to discuss trends and designers in a way that suggests he is well-versed on the topics.
Regarding his store makeover plan, sales are up around 3.4% in refurbished stores in the first quarter year-over-year since the changes were made. The performance gap between the refurbished stores and the others has been consistently widening. As a result, Macy’s has announced plans to expand that initiative.
Just Plain Cheap
Macy’s may be a relatively high-end retailer, but retail shares don’t come at much more of a discount.
The company’s stock is currently trading around 5.75 times forward 12-month earnings, a 50% discount to its peers like Nordstrom (JWN) and Kohl’s (KSS). That’s despite Macy’s arguably cleaner balance sheet.
The company’s market cap is a mere $4.3 billion, well below what its real estate holdings alone are worth. If shares continue to fall, Macy’s might become a strong candidate for a takeover attempt. If that comes to pass, this could potentially be investors’ last opportunity to buy low.
Are you bullish or bearish on Macy’s (M) over the next 12 months? |
TOGETHER WITH STOCKEARNINGS.COM
Now available – a free report that reveals 5 election year stocks poised to reward investors (no matter who wins in November).
ON OUR RADAR
CNN: GasBuddy predicts Labor Day gas prices will drop to $3.27 a gallon, the lowest since 2021, saving Americans $750 million compared to last year.
CBS News: X, formerly Twitter, will permanently close its San Francisco HQ after announcing its move to Texas earlier this year.
AP: The Teamsters Canada Rail Conference sued over orders to resume work at Canada’s largest freight railroads, but trains will keep running.
WSJ: U.S. air-safety regulators have halted SpaceX's rocket launches after a failed landing, delaying the first commercial-astronaut spacewalk.
Axios: The average 401(k) balance is $127,100, below 2021 highs, but 500,000 Fidelity clients have over $1 million, showing tax breaks favor the wealthy.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish
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