Back to top

Image: Bigstock

Macy's (M) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Macy's (M - Free Report) closed at $17.53 in the latest trading session, marking a +0.63% move from the prior day. This change lagged the S&P 500's 0.84% gain on the day. Meanwhile, the Dow gained 0.92%, and the Nasdaq, a tech-heavy index, added 1.06%.

Heading into today, shares of the department store operator had gained 5.38% over the past month, outpacing the Retail-Wholesale sector's gain of 3.8% and the S&P 500's gain of 3.95% in that time.

Investors will be hoping for strength from M as it approaches its next earnings release, which is expected to be February 25, 2020. In that report, analysts expect M to post earnings of $1.93 per share. This would mark a year-over-year decline of 29.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.26 billion, down 2.25% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.72 per share and revenue of $24.49 billion. These totals would mark changes of -34.93% and -1.94%, respectively, from last year.

Any recent changes to analyst estimates for M should also be noted by investors. Recent revisions tend to reflect the latest near-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. 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.

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 3.69% higher. M currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, M is holding a Forward P/E ratio of 6.41. This valuation marks a discount compared to its industry's average Forward P/E of 9.81.

It is also worth noting that M currently has a PEG ratio of 0.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Regional Department Stores stocks are, on average, holding a PEG ratio of 0.92 based on yesterday's closing prices.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 19% 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.

To follow M in the coming trading sessions, be sure to utilize Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Macy's, Inc. (M) - free report >>

Published in