Macy's sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods through its department stores and direct-to-consumer. The company was founded in 1830 and is based in Cincinnati, Ohio.
M Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Macy's Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Macy's Inc ranked in the 62th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 36.33%. In terms of the factors that were most noteworthy in this DCF analysis for M, they are:
In the past 5.51 years, Macy's Inc has a compound free cash flow growth rate of -0.11%; that's higher than only 16.78% of free cash flow generating stocks in the Consumer Cyclical sector.
36% of the company's capital comes from equity, which is greater than only 13.75% of stocks in our cash flow based forecasting set.
Macy's Inc's weighted average cost of capital (WACC) is 6%; for context, that number is higher than only 1.09% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ETH, SMRT, UFPT, JACK, and TSCO can be thought of as valuation peers to M, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.