Guggenheim analyst Robert Drbul has maintained their neutral stance on JWN stock, giving a Hold rating on February 27.
Robert Drbul has given his Hold rating due to a combination of factors surrounding Nordstrom’s recent financial performance and future projections. Although Nordstrom exceeded EPS estimates in its Q4 report, with a reported $0.96 compared to the predicted $0.84, its net sales fell short of expectations. The company demonstrated some positive signs, such as the sequential improvement in customer visits and the growth in sales for its Rack brand, but overall sales still did not meet the anticipated $4.34 billion, landing at $4.29 billion instead. Despite efforts in inventory management leading to reduced markdowns and improved gross margins, these margins were still below the estimated figures. Additionally, there’s an awareness of the uncertain economic climate and its potential impact on discretionary spending, prompting a more cautious outlook for the company’s financial future.
Moreover, Drbul acknowledges the strategic initiatives Nordstrom is implementing, such as improving Rack performance and optimizing operations, which could offer areas of potential growth. However, the report also factors in the macroeconomic uncertainties that could affect consumer behavior and sales trends. With these concerns in mind, along with a transition to cost accounting, Drbul has lowered the FY24 EPS estimate from $2.10 to $1.85 and introduced an FY25 EPS estimate of $2.00. The combination of near-term challenges and cautious optimism for the company’s strategic efforts has led to the decision to maintain a Neutral, or Hold, rating on Nordstrom’s stock.
In another report released on February 27, Citi also maintained a Hold rating on the stock with a $21.00 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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