Macy's digital transformation, store closures drive Cowen upgrade

Macy's Inc. is transforming its business through digital enhancements, store closures, price and inventory management and its loyalty program, according to a Thursday Cowen note. Analysts upgraded the department store retailer to outperform from market perform, and moved its price target to $27 from $23. Analysts led by Oliver Chen say digital penetration is growing to 42% by fiscal 2023, and the store fleet is headed to 500 from 640 in 2019. Wells Fargo analysts said in a recent note that Macy's is the number two online apparel retailer in the U.S. behind Amazon.com Inc. . "Macy's is making the right strategic changes to drive long-term value creation," Cowen said. "[C]losure of lower productivity doors combined with investments in better doors should result in a more vibrant Macy's. Meanwhile, supply chain and pricing initiatives will support robust margins in a normalized environment as management works to maintain double-digit EBITDA margins." Macy's stock has skyrocketed 89.4% for the year to date while the S&P 500 index is up 20.5% for the period. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

Macy's digital transformation, store closures drive Cowen upgrade
Macy's Inc. is transforming its business through digital enhancements, store closures, price and inventory management and its loyalty program, according to a Thursday Cowen note. Analysts upgraded the department store retailer to outperform from market perform, and moved its price target to $27 from $23. Analysts led by Oliver Chen say digital penetration is growing to 42% by fiscal 2023, and the store fleet is headed to 500 from 640 in 2019. Wells Fargo analysts said in a recent note that Macy's is the number two online apparel retailer in the U.S. behind Amazon.com Inc. . "Macy's is making the right strategic changes to drive long-term value creation," Cowen said. "[C]losure of lower productivity doors combined with investments in better doors should result in a more vibrant Macy's. Meanwhile, supply chain and pricing initiatives will support robust margins in a normalized environment as management works to maintain double-digit EBITDA margins." Macy's stock has skyrocketed 89.4% for the year to date while the S&P 500 index is up 20.5% for the period. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.