Markets
M

Is Macy's (M) Stock Undervalued Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Macy's (M). M is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.29, while its industry has an average P/E of 10.78. Over the last 12 months, M's Forward P/E has been as high as 11.55 and as low as 7.12, with a median of 9.46.

Investors should also note that M holds a PEG ratio of 0.98. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. M's industry currently sports an average PEG of 1.35. Over the last 12 months, M's PEG has been as high as 1.36 and as low as 0.84, with a median of 1.11.

Investors should also recognize that M has a P/B ratio of 1.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. M's current P/B looks attractive when compared to its industry's average P/B of 1.87. Over the past year, M's P/B has been as high as 2.18 and as low as 1.26, with a median of 1.82.

Finally, investors should note that M has a P/CF ratio of 3.67. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.59. M's P/CF has been as high as 5.02 and as low as 2.89, with a median of 4.17, all within the past year.

These are just a handful of the figures considered in Macy's's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that M is an impressive value stock right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Macy's, Inc. (M): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

M

Other Topics

Investing Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More