Back to top

Image: Bigstock

Macy's (M) Laps the Stock Market: Here's Why

Read MoreHide Full Article

The most recent trading session ended with Macy's (M - Free Report) standing at $19.27, reflecting a +1.64% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.96% gain on the day. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq added 1.3%.

The department store operator's shares have seen an increase of 4.35% over the last month, surpassing the Retail-Wholesale sector's gain of 4.23% and the S&P 500's gain of 3.69%.

Investors will be eagerly watching for the performance of Macy's in its upcoming earnings disclosure. On that day, Macy's is projected to report earnings of $2.02 per share, which would represent year-over-year growth of 7.45%. Alongside, our most recent consensus estimate is anticipating revenue of $8.1 billion, indicating a 1.99% downward movement from the same quarter last year.

Investors should also take note of any recent adjustments to analyst estimates for Macy's. These recent revisions tend to reflect the evolving nature of short-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. 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. Over the past month, the Zacks Consensus EPS estimate has shifted 2.75% downward. At present, Macy's boasts a Zacks Rank of #4 (Sell).

In terms of valuation, Macy's is currently trading at a Forward P/E ratio of 7.28. For comparison, its industry has an average Forward P/E of 10.68, which means Macy's is trading at a discount to the group.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 209, finds itself in the bottom 18% echelons 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.

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