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Macy's (M) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Macy's (M - Free Report) closed at $22.78, marking a -1.3% move from the previous day. This change lagged the S&P 500's daily loss of 0.76%. Elsewhere, the Dow lost 0.76%, while the tech-heavy Nasdaq lost 10.92%.

Heading into today, shares of the department store operator had gained 13.03% over the past month, outpacing the Retail-Wholesale sector's gain of 5.54% and the S&P 500's gain of 2.18% in that time.

Investors will be hoping for strength from Macy's as it approaches its next earnings release. In that report, analysts expect Macy's to post earnings of $1.62 per share. This would mark a year-over-year decline of 33.88%. Meanwhile, our latest consensus estimate is calling for revenue of $8.22 billion, down 5.08% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.18 per share and revenue of $24.44 billion, which would represent changes of -21.28% and -0.06%, respectively, from the prior year.

Any recent changes to analyst estimates for Macy's should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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. The Zacks Consensus EPS estimate has moved 0.48% lower within the past month. Macy's currently has a Zacks Rank of #3 (Hold).

Investors should also note Macy's's current valuation metrics, including its Forward P/E ratio of 5.52. This represents a discount compared to its industry's average Forward P/E of 9.01.

Meanwhile, M's PEG ratio is currently 0.46. 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 industry currently had an average PEG ratio of 0.84 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 90, which puts it in the top 36% 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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