M
Macy's, Inc.
$22.67
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 38.9% below fair value
You pay
$22.67
Bear
$32.48
Fair
$37.12
Bull
$41.76
Bear
$32.48
+43.3%
$2.32 × 14x P/E
Fair
$37.12
+63.7%
$2.32 × 16x P/E
Bull
$41.76
+84.2%
$2.32 × 18x P/E
Adjust Assumptions
16.0x
2.32$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
9.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$24.25
Divergence from AlphaVal
53%
Summary
Applying a 16x P/E to adjusted EPS of $2.32, the base-case value is $37.12 per share. DDM cross-check: $19.79.
Warnings
Dividend-based valuation: $19.79 (below our primary estimate by 47%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $24.25 (from 41 analysts). Our estimate is 53% 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