Have you been paying attention to shares of Macy's (M)? Shares have been on the move with the stock up 8.2% over the past month. The stock hit a new 52-week high of $23.27 in the previous session. Macy's has gained 32.7% since the start of the year compared to the 7.5% gain for the Zacks Retail-Wholesale sector and the 49% return for the Zacks Retail - Regional Department Stores industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 3, 2025, Macy's reported EPS of $0.09 versus consensus estimate of -$0.13 while it beat the consensus revenue estimate by 2.56%.
For the current fiscal year, Macy's is expected to post earnings of $2 per share on $21.4 in revenues. This represents a -24.24% change in EPS on a -4% change in revenues. For the next fiscal year, the company is expected to earn $1.99 per share on $20.97 in revenues. This represents a year-over-year change of -0.5% and -2.02%, respectively.
Valuation Metrics
While Macy's has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Macy's has a Value Score of A. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.3X. On a trailing cash flow basis, the stock currently trades at 3.8X versus its peer group's average of 8.2X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Macy's an interesting choice for value investors.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Macy's currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Macy's passes the test. Thus, it seems as though Macy's shares could have a bit more room to run in the near term.
How Does M Stack Up to the Competition?
Shares of M have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Dillard's, Inc. (DDS). DDS has a Zacks Rank of #1 (Strong Buy) and a Value Score of C, a Growth Score of C, and a Momentum Score of B.
Earnings were strong last quarter. Dillard's, Inc. beat our consensus estimate by 29.24%, and for the current fiscal year, DDS is expected to post earnings of $30.42 per share on revenue of $6.57 billion.
Shares of Dillard's, Inc. have gained 11.4% over the past month, and currently trade at a forward P/E of 20.67X and a P/CF of 14.1X.
The Retail - Regional Department Stores industry is in the top 3% of all the industries we have in our universe, so it looks like there are some nice tailwinds for M and DDS, even beyond their own solid fundamental situation.
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Macy's, Inc. (M): Free Stock Analysis Report Dillard's, Inc. (DDS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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