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

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Macy's (M - Free Report) closed at $24.06 in the latest trading session, marking a -1.6% move from the prior day. This change lagged the S&P 500's daily gain of 0.64%. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, added 0.91%.

Heading into today, shares of the department store operator had lost 0.24% over the past month, lagging the Retail-Wholesale sector's gain of 2.22% and the S&P 500's gain of 4.16% in that time.

M will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2019. On that day, M is projected to report earnings of $2.65 per share, which would represent a year-over-year decline of 6.03%. Meanwhile, our latest consensus estimate is calling for revenue of $8.46 billion, down 2.36% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for M. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant. M currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that M has a Forward P/E ratio of 7.47 right now. This represents a discount compared to its industry's average Forward P/E of 11.45.

It is also worth noting that M currently has a PEG ratio of 0.88. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Regional Department Stores was holding an average PEG ratio of 1.26 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 216, putting it in the bottom 16% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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