Macy's (NYSE:M) was raised to Neutral from Sell at Citi on Friday, with analysts raising the firm's price target for the stock to $18 from $14 per share.
Analysts told investors in a note that the company's risk/reward is now less skewed to the downside.
"In early December, the stock traded to ~$21 following a WSJ news story suggesting M had received a bid to be acquired at $21. With shares quickly trading up to within 1% of $21, we downgraded to Sell based on our skepticism that anything would materialize," analysts explained.
"We remain skeptical, but with the stock down 13% since the risk/reward is less skewed to the downside," they added.
Additionally, Citi notes that since that time, Macy's confirmed receipt of the $21 offer. However, it did not enter an NDA, expressing its skepticism about the ability to finance a deal and its value.
"Also since that time, on 1/18/24 the WSJ reported (and M acknowledged) M would layoff ~13% of its corp staff, suggesting a further focus on costs and preserving FCF," said analysts.