Macy’s Inc announces Q4 and annual results tomorrow. Will the results show a return to profitability?

Macy’s Inc. (NYSE:M) will announce Q4 and fiscal year results on 22^nd February 2022. In 2021 the company reported losses for the first time in a decade due to impacts of the pandemic including supply chain challenges.

The company sailed through the last year with adequate inventory. For that reason, the EPS is projected to rise from the -$12.68 reported in 2021 to about $1.80 for the year ended Jan 29, 2022.

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As the market waits to see whether the company’s EPS is in line with the previous, it also discounts the fact that the company faces the pressure of rising costs due to a tight macroeconomic environment.

Macy’s Inc., being in the consumer cyclical sector, means that it is likely to face pressure from changing consumption patterns in the coming year hence affecting the valuation.

Macy’s Inc. share price stable at $25

Macy’s share price stabilised at $25 over the last four weeks. The average closing prices ranged between $23 and $26.50. The trended support level remains at $23 with the potential resistance at $28.

Depending on the direction of the results that Macy’s releases tomorrow, the share price has the potential of testing and pushing through the resistance level of $28. Technical analysis, however, shows that the price is highly unlikely to go beyond $31 in the event the company breaks the current resistance level. Overall the company is expected to maintain the share price momentum.

Summary 

Macy’s Inc. will announce Q4 and fiscal year results on 22^nd February with the expectation that the results will show a return to profitability. The Achilles heel in the company’s performance going forward will be the cyclical economy. The share price has stabilised at $25 with the potential to break through the $28 resistance to establish a new level at $31.

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