Macy’s Stock Looks Expensive At $10

Macy’s Stock Looks Expensive At $10

ORLANDO, FLORIDA, UNITED STATES - 2020/03/30: A Macy's store is seen on the day the company ... [+] announced it is furloughing most of its 125,000 employees because of the ongoing coronavirus pandemic, which has sunk sales, and forced the closing of stores. (Photo by Paul Hennessy/SOPA Images/LightRocket via Getty Images)



SOPA Images/LightRocket via Getty Images

Macy's stock (NYSE: M) has become vulnerable due to its high operating costs, mall-based locations, and nonessential product assortment. Consequently, the company's stock has lost 39% of its value so far this year, and currently stands at around $10. And, we believe that the stock could decline further in the medium to long term. A large debt burden of close to $5.4 billion, declining sales trends in the last few years, and an uncertain future of most of its stores located in malls and high-margin tourist business in major cities - will likely add on to its difficulty for a recovery back to pre-Covid levels of around $16. On the bright side, news from Pfizer regarding a vaccine may bring some much-needed relief for the department store chain and a short-term stock price gain, but the timing of