Is the Market Mispricing Macy's Compared With Other Retail Stocks?

Core Viewpoint - Macy's shares have surged nearly 33% year to date, outperforming the S&P 500 index, which is up around 15% [2]. However, Macy's continues to trade at a significant discount compared to its peers, presenting potential investment opportunities [2][8]. Valuation Comparison - Currently, Macy's trades at approximately 12.5 times forward earnings, while Kohl's trades over 20 times and Dillard's nearly 34 times forward earnings [5]. Even when adjusting for expected earnings rebounds, Macy's remains undervalued, trading at just 10.1 times its estimated 2027 earnings of $2.21 per share [6]. Earnings Guidance - Macy's revenue guidance for Q4 FY2026 is between $7.35 billion and $7.5 billion, slightly above analyst expectations of $7.3 billion [9]. However, EPS guidance of $1.35 to $1.55 falls short of the forecasted $1.58 [9]. Potential for Growth - If Macy's holiday season results exceed expectations, the stock could see an unexpected boost early in the new year, indicating potential for significant valuation expansion over the longer term [8].