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Macy’s (NYSE: M) posted a market-beating Q3 today as its turnaround plan focused on improving operations, digital channels, and merchandise, continued to resonate with customers.  

But the management’s “prudent” outlook for the holiday quarter is still resulting in pressure on the retail stock at the time of writing.

The department store chain believes it will earn $1.45 on a per-share basis in its fourth quarter – meaningfully less than $1.58 a share that analysts had called for.

However, both technicals and fundamentals suggest Macy’s stock is a raging “buy” for long-term investors – strongly positioned for continued gains in 2026.  

Here’s why guidance doesn’t warrant selling Macy’s stock

In the earnings release, Macy’s executives confirmed their cautious outlook for the holiday quarter reflects “prudence” – not pessimism.

While they’re excited about the peak retail season, they’re choosing to adjust expectations because the consumer spending patterns can shift rather quickly in the current environment.

Importantly, recent data on US household balance sheets show consumers are not overstretched, with wage growth surpassing inflation, supporting discretionary spending.

That backdrop bodes well for Macy’s, which remains a major destination for apparel, home goods, and gifting.

If the retailer beats its tempered Q4 guidance, it may serve as a near‑term catalyst, potentially driving Macy’s shares higher heading into 2026.

Technicals point to more upside in Macy’s shares

From a technical perspective as well, Macy’s stock is flashing bullish signals for the coming year.

Macy’s is currently trading handily above all of its major moving averages (50‑day, 100‑day, and 200‑day), indicating bulls remain in control across multiple timeframes.  

Its long-term relative strength index (100-day) also currently sits near 60 only, reinforcing that the upward momentum is far from exhaustion.

In other words, Macy’s isn’t in the overbought territory for now.

Valuation-wise, Macy’s is going for less than 0.3x sales at the time of writing, making it one of the cheapest names in the retail space.

According to Barchart, options traders are also pricing in upside in Macy’s shares to north of $26 by late February – further substantiating that their overall trajectory remains upward.

Macy’s is a no-brainer heading into 2026

Beyond earnings and technicals, Macy’s Inc is advancing initiatives that strengthen its long‑term outlook.

The retailer has been investing rather heavily in e‑commerce, expanding its digital storefronts and integrating artificial intelligence driven personalisation tools to improve customer engagement.

With these efforts, Macy’s has positioned itself to capture a larger share of online holiday spending while reducing reliance on brick-and-mortar traffic.

Macy’s has also been experimenting with smaller format stores and enhancing its loyalty program, moves that broaden its reach and deepen customer relationships.

Taken together, these initiatives suggest the NYSE-listed firm is set to compete more fiercely in a fast evolving retail landscape.

Note that Macy’s stock pays a healthy dividend yield of 3.25% as well, which makes it even more attractive for income-focused investors.

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