In the latest trading session, Macy’s (M) closed at $25.72, marking no change from the previous day. This move lagged the S&P 500’s daily gain of 1.56%. Elsewhere, the Dow gained 1.77%, while the tech-heavy Nasdaq added 2.2%.
Coming into today, shares of the department store operator had lost 13.63% in the past month. In that same time, the Retail-Wholesale sector gained 7.6%, while the S&P 500 gained 6.41%.
M will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2019. In that report, analysts expect M to post earnings of $2.65 per share. This would mark a year-over-year decline of 6.03%. Our most recent consensus estimate is calling for quarterly revenue of $8.46 billion, down 2.36% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.02 per share and revenue of $24.97 billion. These totals would mark changes of +6.63% and +0.54%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for M. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
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.
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 has moved 4.59% lower within the past month. M is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, M is currently trading at a Forward P/E ratio of 6.39. Its industry sports an average Forward P/E of 11.66, so we one might conclude that M is trading at a discount comparatively.
Also, we should mention that M has a PEG ratio of 0.75. 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. The Retail – Regional Department Stores was holding an average PEG ratio of 1.18 at yesterday’s closing price.
The Retail – Regional Department Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 108, which puts it in the top 43% 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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