Macy's Downgraded On Concerns About Long-term Sales Pressure

By Tonya Garcia Markets MarketWatch Pulse

Macy's Inc. shares are down 1.7% in Tuesday trading after the retailer was downgraded to neutral from buy at Buckingham Research Group on concerns that the sales pressure the retailer is under won't be relieved anytime soon. Buckingham Research analysts cite a number of challenges facing the company in a Tuesday note, including competition from both online and off-price competition, tourist traffic declines, and limits to expense reduction. While the company does have valuable real estate holdings, the timing on any transactions and gains are unclear. "Moreover, given the acceleration in store closings across the sector, we are concerned that valuations outside of the flagships could come under pressure as Macy's pursues more transactions," analysts said. Macy's shares are down 28.2% for the past year while the S&P 500 index is up 17% for the same period.

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