Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Macy's (M - Free Report) closed at $26.84, marking a +0.83% move from the previous day. This move outpaced the S&P 500's daily loss of 1.42%. Meanwhile, the Dow lost 0.49%, and the Nasdaq, a tech-heavy index, lost 0.47%.

Coming into today, shares of the department store operator had gained 6.44% in the past month. In that same time, the Retail-Wholesale sector lost 3.85%, while the S&P 500 gained 0.39%.

Investors will be hoping for strength from Macy's as it approaches its next earnings release. On that day, Macy's is projected to report earnings of $1.97 per share, which would represent year-over-year growth of 146.25%. Meanwhile, our latest consensus estimate is calling for revenue of $8.44 billion, up 24.54% from the prior-year quarter.

M's full-year Zacks Consensus Estimates are calling for earnings of $4.87 per share and revenue of $24.22 billion. These results would represent year-over-year changes of +320.36% and +39.6%, respectively.

Investors might also notice recent changes to analyst estimates for Macy's. 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.

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.

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 1.01% higher. Macy's is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Macy's's current valuation metrics, including its Forward P/E ratio of 5.46. For comparison, its industry has an average Forward P/E of 6.56, which means Macy's is trading at a discount to the group.

We can also see that M currently has a PEG ratio of 0.46. 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. Retail - Regional Department Stores stocks are, on average, holding a PEG ratio of 0.55 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 2, which puts it in the top 1% 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.


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