The firm reiterated its $65 price target for the American department store company.
Merrill Lynch said it lowered Macy's rating based on a valuation call and because earnings growth is decelerating.
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"We think upward estimate revisions and multiple expansion has played out," said Bank of America/Merrill Lynch analyst Lorraine Hutchinson. "Our flat EBIT growth forecast makes it difficult to argue for multiple expansion above 7x."
Separately, TheStreet Ratings team rates MACY'S INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate MACY'S INC (M) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."