Macy’s shares gain the most in six months on Wednesday as quarterly same-store sales, earnings surge past market expectations

Shares of Macy’s Inc (M) surged over 10% during the trading session in New York yesterday, after the company reported first-quarter same-store sales and earnings well above market expectations. Macy’s also revised up its full-year earnings forecast.

Macy’s shares closed higher for a second consecutive trading session on Wednesday. It has also been the sharpest daily surge since November 9th 2017. The stock went up 10.83% ($3.24) to $33.17, after touching an intraday high at $33.40, or a price level not seen since March 1st 2017 ($33.67).

In the week ended on May 13th the shares of the department store chain lost 5.12% of their market value compared to a week ago, which marked a second consecutive period of decrease.

However, due to yesterdays gain, the stock has neutralized earlier losses and is now up 6.76% so far during the current month, following a 4.47% surge in April. The latter has been a sixth straight month of gains.

For the entire past year, the shares of Macy’s Inc went down 29.66%, following a 2.37% surge in 2016.

Macy’s total revenue surged 3.6% to $5.54 billion during the quarter ended on May 5th compared to the same period a year earlier. In comparison, the median analyst estimate had pointed to $5.36 billion in revenue.

The companys same-store sales were reported to have increased 4.2% year-on-year during the first quarter, supported by stronger sales at its Bluemercury, Bloomingdale’s as well as its own Macy’s outlets. In comparison, analysts on average had expected a 1.4% sales growth.

“We exceeded our expectations and saw strong performance across all three brands … as well as across all geographic regions”, Chief Executive Officer Jeff Gennette was quoted as saying by Reuters.

Meanwhile, net income attributable to shareholders soared almost 200% to $139 million (or $0.45 per share) during the latest quarter.

At the same time, Macy’s earnings per share, excluding special items, were reported at $0.48 during the quarter ended on May 5th, which outstripped market consensus ($0.37 per share).

The department store operator now projects full-year adjusted earnings per share within the range of $3.75-$3.95, or a revision up from a range of $3.55-$3.75 per share, as expected previously.

Macys also projects a 1%-2% growth in full-year comparable sales at its own as well as at licensed stores. That compares with a median analyst forecast of a 0.3% increase in full-year sales.

Additionally, Macy’s announced that a joint venture agreement with Fung Retailing Ltd in China would be discontinued. The venture was established in 2015, with Macys holding a 65% stake.

According to CNN Money, the 17 analysts, offering 12-month forecasts regarding Macy’s Inc’s stock price, have a median target of $31.00, with a high estimate of $36.00 and a low estimate of $21.00. The median estimate is a 6.54% decrease compared to the closing price of $33.17 on May 16th.

The same media also reported that 12 out of 20 surveyed investment analysts had rated Macy’s Inc’s stock as “Hold”, while 3 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Macy’s stock are presented as follows:

R1 – $33.35
R2 – $33.53
R3 (Range Resistance – Sell) – $33.72
R4 (Long Breakout) – $34.26
R5 (Breakout Target 1) – $34.90
R6 (Breakout Target 2) – $35.27

S1 – $32.99
S2 – $32.81
S3 (Range Support – Buy) – $32.62
S4 (Short Breakout) – $32.08
S5 (Breakout Target 1) – $31.44
S6 (Breakout Target 2) – $31.07

By using the traditional method of calculation, the weekly levels of importance for Macy’s Inc (M) are presented as follows:

Central Pivot Point – $29.73
R1 – $31.15
R2 – $32.66
R3 – $34.08
R4 – $35.50

S1 – $28.22
S2 – $26.80
S3 – $25.29
S4 – $23.78