Why Macy's (M) Stock Is Rallying Today
NEW YORK (TheStreet) -- Macy's (M) - Get Report stock is advancing by 3.14% to $32.19 in late-morning trading on Friday, as a surge in April retail sales assuages investors' concerns about downbeat first quarter earnings within the sector.
U.S. retail sales gained by 1.3% in April, notching their biggest monthly increase since March 2015, according to the Commerce Department. Excluding automobiles, gasoline, building materials and food services, retail sales rose by 0.9% last month vs. an upwardly revised 0.2% increase in March.
The data follow disappointing quarterly results reported by retailers such as Nordstrom (JWN), Dillard's (DDS), J.C. Penney (JCP) and Kohl's (KSS).
Macy's in particular reported a 7.4% year-over-year decline in first quarter revenue and slashed its full-year outlook on Wednesday.
"The retail sales report shows that recent claims of the demise of the U.S. consumer have been greatly exaggerated," Steve Murphy, a U.S. economist at Capital Economics, told Reuters.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Macy's strengths such as its reasonable valuation levels, expanding profit margins and notable return on equity are countered by weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.
You can view the full analysis from the report here: M
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
