M
Macy's, Inc.
$24.12
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 28.5% below fair value
You pay
$24.12
Bear
$29.52
Fair
$33.73
Bull
$37.95
Bear
$29.52
+22.4%
$2.44 × 14x P/E
Fair
$33.73
+39.9%
$2.44 × 16x P/E
Bull
$37.95
+57.3%
$2.44 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
9.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $21.33 from 40 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $33.73 per share.
Warnings
Dividend-based valuation: $19.55 (below our primary estimate by 50%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $21.33 (from 40 analysts). Our estimate is 83% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples