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

Zacks Equity Research

Macy's (M) closed at $15.78 in the latest trading session, marking a +0.57% move from the prior day. This move outpaced the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq lost 0.3%.

Prior to today's trading, shares of the department store operator had lost 5.65% over the past month. This has lagged the Retail-Wholesale sector's loss of 1.56% and the S&P 500's loss of 0.25% 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 November 21, 2019. On that day, M is projected to report earnings of $0.04 per share, which would represent a year-over-year decline of 85.19%. Our most recent consensus estimate is calling for quarterly revenue of $5.35 billion, down 0.97% from the year-ago period.

M's full-year Zacks Consensus Estimates are calling for earnings of $2.86 per share and revenue of $24.84 billion. These results would represent year-over-year changes of -31.58% and -0.51%, respectively.

It is also important to note the recent changes to analyst estimates for M. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 remained stagnant. M is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, M currently has a Forward P/E ratio of 5.49. For comparison, its industry has an average Forward P/E of 9.84, which means M is trading at a discount to the group.

Also, we should mention that M has a PEG ratio of 0.73. 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 0.86 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 189, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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