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Macy's (M) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
McCormick (MKC) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Macy's (M) closed the most recent trading day at $24.26, moving +0.54% from the previous trading session. This change outpaced the S&P 500's 0.47% gain on the day. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.34%.

Prior to today's trading, shares of the department store operator had lost 0.25% over the past month. This has lagged the Retail-Wholesale sector's gain of 5.21% and the S&P 500's gain of 4.67% in that time.

M will be looking to display strength as it nears its next earnings release. On that day, M is projected to report earnings of $0.36 per share, which would represent a year-over-year decline of 25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.53 billion, down 0.21% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.10 per share and revenue of $24.98 billion. These totals would mark changes of -25.84% and +0.04%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for M. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.37% lower. M is currently a Zacks Rank #3 (Hold).

Digging into valuation, M currently has a Forward P/E ratio of 7.78. This represents a discount compared to its industry's average Forward P/E of 11.85.

Investors should also note that M has a PEG ratio of 0.92 right now. 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. Retail - Regional Department Stores stocks are, on average, holding a PEG ratio of 1.22 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 6, which puts it in the top 3% 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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