Nordstrom, Inc. (JWN): Is Now the Time to BUY?

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Nordstrom, Inc. (JWN): Is Now the Time to BUY?

By Carly Forster

Nordstrom, Inc. (NYSE:JWN) is a Seattle, Washington based American high-end fashion retailer that sells clothing, shoes and accessories for men, women and children. The company has 117 full-line stores and 151 Nordstrom Rack stores in 36 states and serves customers on Nordstrom.com in 44 countries. The department store reported its first quarter earnings on May 15 and its results were quite impressive. Furthermore, the company revealed it is in search of a financial partner for its credit card receivables, valued at $2 billion.

Nordstrom, Inc. (NYSE:JWN) reported $0.72 earnings per share, exceeding analysts’ consensus estimate of $0.68 by $0.04. During the same quarter last year, the company posted $0.73 earnings per share. The retailer had profits of $2.84 billion for the quarter, slightly lower than analysts’ consensus estimate of $2.86 billion. Nordstrom conveyed total sales growth of 6.8% over last year with a comparable sales increase of 3.9%. On average, analysts predict that Nordstrom will post $3.85 earnings per share for the current fiscal year.

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Nordstrom, Inc. (NYSE:JWN) announced late Thursday, May 15 that it is looking for a financial partner for its credit card business in order to focus more on customers and increase its financial flexibility. Nordstrom President Blake Nordstrom explained, “The credit environment has evolved, such that today, we believe we can pursue an arrangement that allows us to maintain and enhance our customer focus, while gaining greater financial flexibility through the potential sale of our credit receivables.” The retailer does not forecast that any possible partnership will impact jobs or current existing operations.

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Shares of Nordstrom, Inc. (NYSE:JWN) opened at $67.12 on Friday, May 16. The company has a 1-year high of $70.71 and a 1-year low of $54.90. The stock’s daily moving average is $68.73 and has a 50-day moving average of $61.79. The market cap for Nordstrom is $13.36 billion and its P/E ratio is 19.03.

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On May 16, Credit Suisse analyst Michael Exstein upgraded his rating for Nordstrom from Neutral to Outperform with a $78 price target. He and his team see this as a “bridge to the likely earning acceleration in 2016.” Exstein has a +5.8% average return over the S&P 500 and a 50% success rate according to TipRanks.

Also on May 16, Deutsche Bank analyst Paul Trussell maintained a BUY rating and raised his price target from $67 to $72. He noted, “Shares have reached a point of inflection with valuation now beginning to reflect the company’s strong growth prospects, best in class online and off-price business segments, and higher end customer base.” Trussell has a +1.6% average return over the S&P 500 and a 55% success rate.

On the other hand, Morgan Stanley analyst Kimberly Greenberger reiterated an equal-weight rating on May 16. She reasoned, “[Nordstrom] delivered 4c upside to consensus 1Q driven by better sales growth, but elevated investments, Rack expansion and promotions caused a $5M NI decline. The stock traded up on potential sale of $2B credit card receivables. We think it’s too early to estimate the impact.” Greenberger has a -1.0% average return over the S&P 500 and a 34% success rate.

Carly Forster writes about stock market news. She can be reached at [email protected]

Via: tipranks

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