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

Zacks Equity Research

Macy's (M) closed at $15.85 in the latest trading session, marking a +1.73% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.37%. Elsewhere, the Dow gained 0.42%, while the tech-heavy Nasdaq added 0.56%.

Coming into today, shares of the department store operator had gained 2.43% in the past month. In that same time, the Retail-Wholesale sector gained 2.79%, while the S&P 500 gained 4.42%.

Investors will be hoping for strength from M as it approaches its next earnings release, which is expected to be November 21, 2019. On that day, M is projected to report earnings of $0.02 per share, which would represent a year-over-year decline of 92.59%. Our most recent consensus estimate is calling for quarterly revenue of $5.33 billion, down 1.41% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.84 per share and revenue of $24.84 billion. These totals would mark changes of -32.06% and -0.51%, respectively, from last year.

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. 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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. M is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note M's current valuation metrics, including its Forward P/E ratio of 5.48. This represents a discount compared to its industry's average Forward P/E of 9.97.

It is also worth noting that M currently has a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. M's industry had an average PEG ratio of 0.87 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 226, which puts it in the bottom 12% 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.


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