Guggenheim analyst Robert Drbul has maintained their neutral stance on JWN stock, giving a Hold rating yesterday.
Robert Drbul has given his Hold rating due to a combination of factors related to Nordstrom’s financial performance. Nordstrom reported an adjusted diluted EPS of $0.25, surpassing Drbul’s estimate of $0.05. However, net sales declined, falling short of the estimated $3.29 billion to reach only $3.20 billion. Despite certain categories showing signs of improvement, the company’s management remains focused on bettering Rack performance, enhancing inventory productivity, and optimizing its supply chain. Importantly, the Rack digital channel has become profitable on a year-to-date basis.
Nonetheless, Drbul remains cautious due to macroeconomic uncertainty and a slowdown in sales trends. Although the gross margin expanded to 35.0%, which was above the estimated 34.2%, the company is witnessing gradually rising credit card delinquencies, now exceeding pre-pandemic levels. While Drbul maintains a FY23 EPS estimate of $2.00, due to a conservative outlook for the following year, he has reduced the FY24 EPS estimate to $2.10. He is awaiting signs of stabilization and improvement in the Rack business, hence the decision to maintain a Neutral rating on Nordstrom.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $17.00 price target.
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Nordstrom (JWN) Company Description:
Nordstrom, Inc. engages in the manufacture and trade of clothes, shoes and accessories. It operates through the following business segments: Retail, Credit and Corporate/Other. The Retail segment manages physical stores and online shops. The Credit segment offers a range of payment options to customers. The Corporate/Other segment includes sales return reserve, expenses, and assets. The company was founded by John W. Nordstrom in 1901 and is headquartered in Seattle, WA.
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