10 Cheap Retail Stocks to Buy According to Analysts

8. Macy’s, Inc. (NYSE:M)

Forward P/E: 5.59

Analyst Upside Potential as of September 23, 2024: 11.33%

Number of Hedge Fund Holders as of Q4 2024: 44

Macy’s (NYSE:M) is an omnichannel retail company that operates department stores, websites, and mobile applications under three brands: Macy’s, Bloomingdale’s, and Bluemercury. It sells a wide range of merchandise, including apparel, home furnishing, cosmetics, accessories, and a number of other consumer goods. It operates in 43 states, Puerto Rico, Guam, and the District of Columbia. Macy’s (NYSE:M) has an elaborate portfolio of brands, including Macy’s, Macy’s Backstage, Macy’s small format, Bloomingdale’s, Bloomingdale’s The Outlet, Bluemercury, and Bloomie’s. It also operates in Dubai, United Arab Emirates, and Al Zahra, Kuwait, through a license agreement with Al Tayer Insignia.

Over the past three years, the company’s annual revenue has grown at a CAGR of 2.34%. Total Q2 2024 revenue of $5.10 billion also underwent a 1.15% one-year increase when compared to last year. Macy’s (NYSE:M) is improving its operational structure by closing down stores with inadequate sales and opening small-format stores in their place. It has plans in place to open around 30 new small-format stores through 2025. It is also addressing weaknesses in men’s apparel, home, and handbags.

To work on the opportunity in men’s apparel, the company is launching a new private brand targeting the under 40 consumers to support their growth goals. In addition, it is diversifying its brand portfolio in handbags. Apart from increasing demand for Coach’s new product assortment, Lauren by Ralph Lauren and Karl Lagerfeld are gaining public attention. In the home segment, the company is strengthening its holiday gift-giving assortment and planning a broad private brand reimagination for the coming year.

Macy’s (NYSE:M) is adjusting to changing consumer behavior to mirror its growth mindset by pulling back in areas with soft growth and protecting the ones with momentum. It is evolving its products through close partnerships with vendors and serving its customers better through owned, marketplace, and concession. It is also improving its digital standing, focusing on search engine optimization, site enhancements, transparent pricing, and a better mobile experience.

As of Q2 2024, 44 hedge funds hold stakes in Macy’s (NYSE:M), with Arrowstreet Capital being the most prominent shareholder with 9.5 million shares. The stock takes the eighth spot on our list of the top cheap retail stocks to buy with high analyst upside potential.