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

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Macy's (M - Free Report) closed the most recent trading day at $17.84, moving +0.96% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.16%. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq added 0.12%.

Heading into today, shares of the department store operator had lost 1.51% over the past month, lagging the Retail-Wholesale sector's gain of 12.2% and the S&P 500's gain of 8.67% in that time.

Wall Street will be looking for positivity from Macy's as it approaches its next earnings report date. The company is expected to report EPS of $0.87, down 32.56% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.52 billion, down 2.33% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.56 per share and revenue of $24.43 billion. These totals would mark changes of -14.12% and -0.1%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Macy's. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 2.03% lower. Macy's is currently a Zacks Rank #3 (Hold).

In terms of valuation, Macy's is currently trading at a Forward P/E ratio of 3.88. For comparison, its industry has an average Forward P/E of 6.37, which means Macy's is trading at a discount to the group.

We can also see that M currently has a PEG ratio of 0.32. 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. Retail - Regional Department Stores stocks are, on average, holding a PEG ratio of 0.62 based on yesterday's closing prices.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 243, putting it in the bottom 4% 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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