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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 $15.10, marking a -0.92% move from the previous day. This move lagged the S&P 500's daily loss of 0.76%. At the same time, the Dow lost 0.52%, and the tech-heavy Nasdaq lost 1.15%.

Prior to today's trading, shares of the department store operator had lost 4.15% over the past month. This has lagged the Retail-Wholesale sector's gain of 1.13% and the S&P 500's loss of 1.4% in that time.

Investors will be hoping for strength from Macy's as it approaches its next earnings release, which is expected to be August 22, 2023. The company is expected to report EPS of $0.13, down 87% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.04 billion, down 9.91% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.88 per share and revenue of $23.05 billion, which would represent changes of -35.71% and -5.68%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Macy's. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.93% lower. Macy's is currently a Zacks Rank #5 (Strong Sell).

In terms of valuation, Macy's is currently trading at a Forward P/E ratio of 5.29. This valuation marks a discount compared to its industry's average Forward P/E of 9.21.

Meanwhile, M's PEG ratio is currently 0.44. 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 0.93 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 106, which puts it in the top 43% 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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