The major retailer also posted a fourth-quarter earnings and revenue beat
The shares of Macy's Inc (NYSE:M) are down 2.7% to trade at $11.39 at last check, despite the retail giant reporting blowout fourth-quarter earnings of 50 cents per share -- substantially higher than Wall Street's estimates of four cents per share -- as well as a revenue beat. This marks Macy's first quarterly profit in a year, with the company also releasing a better-than-expected 2021 forecast in anticipation of customers returning to department stores, as the vaccine rollout picks up and the pandemic eventually fades away.
On the charts, the security has just taken a huge step back from a bull gap that led shares to a Jan. 27, nearly two-year high of $22.29. And while Macy's stock is still receiving support from the 40-day moving average, shares are now struggling with overhead pressure at the $16 mark. In the last nine months, though, M has added over 136%.
The brokerage bunch is still overwhelmingly bearish towards the security, with eight of the nine in question carrying a tepid "hold" or worse rating. What's more, the 12-month consensus target price of $10.46 is a whopping 28.9% discount to the stock's current levels.
Meanwhile, short sellers are running for the exits, though there is plenty of pessimism left to be unwound. Short interest fell 51.6% during the last two reporting periods, but the 52.63 million shares sold short still account for a hefty 17.1% of the the security's available float.
The options pits are decidedly optimistic, with a strong appetite for calls. This is per M's 50-day call/put volume ratio of 3.50 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 87% of readings from the past year. This means long calls are being picked up at a faster-than-usual clip.
Now may be a good opportunity to weigh in on Macy's stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 83% stands in the relatively low 22nd percentile of its annual range. In simpler terms, the stock currently sports attractively priced premiums.