Key insights
- The article analyzes Macy's (M) as an asset play, highlighting its significant cash reserves and substantial real estate holdings, particularly in urban centers. With debt being actively paid down and projected free cash flow, the company's estimated asset value significantly exceeds its current market capitalization. Store closures and real estate divestitures are expected to unlock further value, suggesting potential upside for investors.
$1.4 billion in cash Long term debt: $2.433 billion Long term lease liabilities: $2.656 billion Debt is being actively paid down Free cash flow $800 million in 2025 Macys is closing ~100 stores through 2028 and terminating the lease and/or selling off the real estate Real estate and land on books: $4.282 billion at historical cost Macys has owned all of its real estate for decades. Most of it in large Urban cities, such as Detroit, Los Angeles, Chicago, and New York; where real estate values have soared. Conservatively appreciate the real estate at 5% for 25 years, and you have a 2026 value estimate of $14.56 billion Subtract the debt and lease liabilities from the cash and real estate value and you have company assets of $10.871 billion Macys market cap is $6.48 billion “Fair value”, whether it is from capital appreciation or a buy out, would be more than 60% upside. Please let me know your thoughts or feedback