Macy's (M) Gains But Lags Market: What You Should Know

Macy's (M) closed at $26.21 in the latest trading session, marking a +1% move from the prior day. This change lagged the S&P 500's 1.79% gain on the day. On the other hand, the Dow registered a gain of 1.71%, and the technology-centric Nasdaq increased by 2.59%.

The stock of department store operator has risen by 9.59% in the past month, leading the Retail-Wholesale sector's gain of 8.07% and the S&P 500's gain of 1.72%.

The investment community will be paying close attention to the earnings performance of Macy's in its upcoming release. The company is expected to report EPS of $0.35, down 14.63% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $4.81 billion, indicating a 0.09% downward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.19 per share and a revenue of $21.76 billion, indicating changes of -5.6% and -0.6%, respectively, from the former year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Macy's. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 1.36% rise in the Zacks Consensus EPS estimate. Macy's is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Macy's is currently trading at a Forward P/E ratio of 11.84. This signifies a discount in comparison to the average Forward P/E of 16.06 for its industry.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 102, putting it in the top 42% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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