Bull of the Day: Macy's (M)

When the market is humming along near all-time highs, it’s easy to feel like everything is working. But seasoned investors know that eventually the market gets selective. When that happens, stocks with real earnings momentum are the ones that keep getting rewarded. That’s exactly where today’s Bull of the Day fits in.

Macy’s (M) checks the right boxes with a Zacks Rank #1 (Strong Buy), driven by meaningful upward earnings estimate revisions. Over the last two months, analysts have steadily raised their outlook for both this year and next, signaling growing confidence that management’s turnaround strategy is translating into durable results. Current-year consensus EPS has moved higher, and next year’s numbers have followed suit. We call that the lifeblood of sustained stock performance.

Over the course of the last 60 days, three analysts have increased their earnings estimates for both the current year and next year. The bullish moves have pushed up our Zacks Consensus Estimate from $1.96 to $2.16 for the current year and up from the same $1.96 to $2.23 for next year.

What’s powering the move is execution. Macy’s Polaris strategy is finally showing teeth:. That means tighter inventory discipline, smarter merchandising, stronger private-label penetration, and an omnichannel approach that actually works. Digital continues to be a major contributor, but unlike many retailers, Macy’s physical stores are pulling their weight again as traffic stabilizes and margins improve. Better inventory management has also reduced discounting pressure, helping gross margins recover.

The result is a legacy retailer proving it can still grow earnings in a tough environment. With estimates trending higher and expectations resetting in Macy’s favor, this is the kind of stock that can keep working even if the broader market cools off. When earnings are moving up, price usually follows, and that’s why Macy’s (M) earns today’s Bull of the Day title. ????????

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

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