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

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Macy's (M - Free Report) closed the most recent trading day at $16.47, moving +0.06% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.5%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq gained 2.1%.

Heading into today, shares of the department store operator had lost 3.74% over the past month, lagging the Retail-Wholesale sector's gain of 0.37% and the S&P 500's gain of 0.54% in that time.

Wall Street will be looking for positivity from M as it approaches its next earnings report date. This is expected to be February 25, 2020. On that day, M is projected to report earnings of $1.93 per share, which would represent a year-over-year decline of 29.3%. Meanwhile, our latest consensus estimate is calling for revenue of $8.26 billion, down 2.25% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for M. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.87% higher. M is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note M's current valuation metrics, including its Forward P/E ratio of 7.13. Its industry sports an average Forward P/E of 9.45, so we one might conclude that M is trading at a discount comparatively.

It is also worth noting that M currently has a PEG ratio of 0.95. 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. M's industry had an average PEG ratio of 0.95 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 117, which puts it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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