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Macy's (M) Gains As Market Dips: What You Should Know

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In the latest trading session, Macy's (M - Free Report) closed at $25.66, marking a +1.14% move from the previous day. This change outpaced the S&P 500's 0.94% loss on the day. At the same time, the Dow lost 0.87%, and the tech-heavy Nasdaq lost 1.18%.

Prior to today's trading, shares of the department store operator had lost 20.02% over the past month. This has lagged the Retail-Wholesale sector's gain of 7.65% and the S&P 500's gain of 8.01% in that time.

Investors will be hoping for strength from M as it approaches its next earnings release, which is expected to be February 26, 2019. In that report, analysts expect M to post earnings of $2.65 per share. This would mark a year-over-year decline of 6.03%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.46 billion, down 2.36% from the year-ago period.

It is also important to note the recent changes to analyst estimates for M. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 10.16% lower. M currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, M is holding a Forward P/E ratio of 7.75. Its industry sports an average Forward P/E of 11.72, so we one might conclude that M is trading at a discount comparatively.

Investors should also note that M has a PEG ratio of 0.91 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Regional Department Stores was holding an average PEG ratio of 1.24 at yesterday's closing price.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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