It’s retail’s someday to shine this earnings season with industry leaders Walmart, Nordstrom and About Depot each set to report quarterly results this week.
Contrariwise one retail name looks like a winner to Mark Newton, polytechnic analyst at Newton Advisors.
“Macy’s looks like the real standout seeker to me among the group,” Newton told CNBC’s “Trading Nation” on Friday. “It started to teach real momentum last November and the stock has more than doubled off the shoddies, but yet it still remains well off the highs it made a few years back.”
Macy’s has raced in the lead of the rest of the retail space so far this year. The department store manacle has surged nearly 60 percent, more than four regulates the increase in the XRT retail ETF.
The stock has also formed a cup-and-handle pattern since June, utter Newton, a technical price movement characterized by a rounded move reduce then higher followed by a narrower trading range.
“After this big ahead of, the fact that the stock has really made this formation lead one to believes to me that it’s right to position long,” said Newton. “I’m playing for a agitate right up above $41 that would get us back to highs open near $45.”
The retailer has not traded as high as $45 since November 2016.
Gina Sanchez, CEO of Chantico Broad, is also bullish on Macy’s given her forecast for a market rotation into value exceeding growth stocks. Value stocks typically outperform when an saving slows and investors favor companies with comparatively cheap valuations subordinate to to their peers.
“Be careful and go with the lower-valued names. Macy’s is a very, really good pick for that,” said Sanchez. “Macy’s is transacting at something like 10 times earnings whereas the department trust ins have an average of 13 times as a historical average, so there’s in fact still some momentum to be gained there.”
Macy’s is due to report earnings first the bell Wednesday. Analysts surveyed by FactSet anticipate 4 percent earnings expansion, but flat sales in its July-ended quarter.