Carrier Global will replace Macy's on the S&P 500
Macy's Inc (NYSE: M) is down 7.5% to trade at $4.54 this morning, following the S&P Dow Jones Indices decision to replace Macy's with Carrier Global (CARR) on the benchmark S&P 500 Index (SPX), and move M to a small-cap 600 index, effective April 6. Macy's has been hit hard by the global coronavirus pandemic, with an onslaught of store closures making it difficult for the retailer to keep its head above water.
The equity hit an all-time low of $4.41 earlier today and is now trading solidly in penny stock territory -- a far ways off from its 2015 record peak near the $72 level. Macy's is down 64.9% in the last month, and off over 80% year-over-year, guided lower by pressure at its 10-day moving average.
Analysts are bearish coming into today, with all 10 in coverage sporting a "hold" or worse rating. There's still room for price target cuts, however. The 12-month consensus target price of $10.23 is a whole 124.6% premium to current levels.
Shorts sellers are piling on the department store name, with short interest jumping 23.8% in the last two reporting periods to make up 98.1 million shares sold short. These pessimistic positions make up 31.8% of the stock's available float, or a little over a week at the M's average daily pace of trading.
In the options pits, puts have picked up in popularity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.23 puts have been bought for every call in the past 10 days. This ratio sits in the 91st percentile of its annual range, suggesting this appetite for long puts is bigger than usual.