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Bear of the Day: Macy's (M)

David Bartosiak

The market has had its fair share of whipsaw action recently. In that sort of environment, it’s important to make sure you’re investing in what matters. Since the beginning of the stock market, ultimately stock prices have been about one thing; earnings. It’s earnings that drive the market. With strong trends, you can have long-term investments which reap rewards year after year. Weak trends can lead to ruin. One way to pick out the weaker trends is by leaning on the Zacks Rank. Stocks with favorable Zacks Ranks have strong earnings trends while those with lower rankings have negative earnings trends.

Today’s Bear of the Day is retailer Macy’s (M). Macy's, Inc., an omnichannel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of April 1, 2019, it operated approximately 680 department stores under the Macy's and Bloomingdale's names; and 190 specialty stores, such as Bloomingdale's The Outlet, Bluemercury, Macy's Backstage, and STORY in 43 states, the District of Columbia, Guam, and Puerto Rico. 

Macy's, Inc. Price and Consensus

Macy's, Inc. Price and Consensus

Macy's, Inc. price-consensus-chart | Macy's, Inc. Quote

Macy’s is a Zacks Rank #5 (Strong Sell) because of the series of negative earnings estimate revisions coming from analysts. Over the last week alone, four analysts have cut their estimates for the current year and next year as well. The bearish sentiment has dropped the Zacks Consensus Estimate for the current year from $3.12 to $2.92. Next year’s number has come down from $2.95 to $2.71. That means analysts are expecting earnings contraction of 30% this year and 7% next year.

The Retail – Regional Department Stores industry ranks in the Bottom 4% of our Zacks Industry Rank. Stocks with the highest Zacks Rank in this industry are Zacks Rank #3 (Hold) stocks Dillard’s (DDS) and JC Penny (JCP).

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