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

Zacks Equity Research

Macy's (M) closed the most recent trading day at $21.29, moving +0.38% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.73%. Meanwhile, the Dow lost 0.37%, and the Nasdaq, a tech-heavy index, lost 1.32%.

Coming into today, shares of the department store operator had lost 0.28% in the past month. In that same time, the Retail-Wholesale sector lost 1.32%, while the S&P 500 lost 0.27%.

Investors will be hoping for strength from M as it approaches its next earnings release, which is expected to be August 14, 2019. In that report, analysts expect M to post earnings of $0.46 per share. This would mark a year-over-year decline of 22.03%. Meanwhile, our latest consensus estimate is calling for revenue of $5.63 billion, up 1.02% from the prior-year quarter.

M's full-year Zacks Consensus Estimates are calling for earnings of $3.11 per share and revenue of $25.10 billion. These results would represent year-over-year changes of -25.6% and +0.53%, respectively.

Any recent changes to analyst estimates for M should also be noted by investors. 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.

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 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 0.21% lower. M currently has a Zacks Rank of #4 (Sell).

Digging into valuation, M currently has a Forward P/E ratio of 6.82. This valuation marks a discount compared to its industry's average Forward P/E of 9.36.

It is also worth noting that M currently has a PEG ratio of 0.91. 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. The Retail - Regional Department Stores industry currently had an average PEG ratio of 0.94 as of yesterday's close.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 245, putting it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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