Macy’s (M) closed the most recent trading day at $24.65, moving +1.32% from the previous trading session. This change outpaced the S&P 500’s 0.21% gain on the day. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 0.01%.
Heading into today, shares of the department store operator had lost 8.53% over the past month, lagging the Retail-Wholesale sector’s loss of 8.18% and the S&P 500’s loss of 8.08% in that time.
Investors will be hoping for strength from Macy’s as it approaches its next earnings release. In that report, analysts expect Macy’s to post earnings of $0.79 per share. This would mark year-over-year growth of 102.56%. Meanwhile, our latest consensus estimate is calling for revenue of $5.35 billion, up 13.58% from the prior-year quarter.
M’s full-year Zacks Consensus Estimates are calling for earnings of $4.33 per share and revenue of $24.63 billion. These results would represent year-over-year changes of -18.46% and +0.7%, respectively.
Any recent changes to analyst estimates for Macy’s should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Macy’s is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Macy’s has a Forward P/E ratio of 5.62 right now. For comparison, its industry has an average Forward P/E of 8.19, which means Macy’s is trading at a discount to the group.
It is also worth noting that M currently has a PEG ratio of 0.47. 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. M’s industry had an average PEG ratio of 1.02 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 44, which puts it in the top 18% 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.
To follow M in the coming trading sessions, be sure to utilize Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.