Question

1.Find Macy P/E ratio, enter the stock symbol to get to the company's front page. (The P/E ratio is listed on the company's front page).

2.Compare the P/E ratio of your company with the industry average or with major competitors.

3.Is there a difference between these numbers?

4.Is the stock overvalued, undervalued, or properly valued? Why?

5.In accordance with the findings, is it reasonable to buy the stock? explain.

include a paragraph in the initial response reflect on specifically what was learned from the assignment and how this could apply in the workplace.

Answer 1

1) Macy's has a P/E ratio of 4.81

2) The following are the list of competitors with their corresponding P/Es:

Competitors	P/E
Walmart	49.22
Target	20.86
Kohl's	12.17
Nordstrom	11.57
Dillard's	12.54
Industry Average	21.27

3) As it can be seen from the data collected the P/E of Macy's is significantly less than the industry average

4) The P/E of Macy's indicates that the stock is undervalued compared to the other stocks in the market. This is because the stock price of Macy's is about 4.8 times its earnings per stock while the industry has an average of about 21 times. In other words Macy's stocks are only 4.8 times for each dollar earned while for the same dollar earned the other competitors have a stock that is more expensive.

5) It is reasonable to buy the stock since it is undervalued and as soon as the market realizes this the value of the stock is likely to go up.