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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 $26.19 in the latest trading session, marking a -0.61% move from the prior day. This change lagged the S&P 500's daily gain of 0.51%. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 0.1%.

Coming into today, shares of the department store operator had gained 4.77% in the past month. In that same time, the Retail-Wholesale sector gained 4.62%, while the S&P 500 gained 5.51%.

Macy's will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.79, up 102.56% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.38 billion, up 14.25% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.33 per share and revenue of $24.77 billion, which would represent changes of -18.46% and +1.29%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Macy's. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.61% higher. Macy's is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Macy's's current valuation metrics, including its Forward P/E ratio of 6.09. Its industry sports an average Forward P/E of 8.54, so we one might conclude that Macy's is trading at a discount comparatively.

Meanwhile, M's PEG ratio is currently 0.51. 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. M's industry had an average PEG ratio of 1.05 as of yesterday's close.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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