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Nordstrom shares have fallen 13% year to date, while the S&P 500 has fallen 17%.
Ben Gabbe/Getty Images for Nordstrom
Fashionistas’ shopping habits are back in full swing, according to analysts, who say that is a good thing for
Nordstrom
stock as consumers look to buy dressier clothes to fit their post-Covid-19 lifestyles.
“More customers are shopping for social events, travel, and return to office and when overlaid with exposure to the high-end, more insulated consumer from inflation impacts, JWN is well positioned,” Jefferies analyst Stephanie Wissink wrote in a research note Wednesday.
“We are highly encouraged by the direction and degree of improvement; given the thesis has had fits and starts, we’re looking for a series of quarters that reinforces a growth and margin uplift to justify a higher valuation and estimate upside potential,” she added.
The stock (ticker: JWN) was up 6% in premarket trading to $21.81, after the department store lifted its financial forecasts for the second time this year. Shares have fallen 13% year to date, while the
S&P 500
has fallen 17%.
For the full year, Nordstrom now expects total revenue growth, which includes retail sales and credit-card revenue, of 6% to 8% from last year, up from a previous range of 5% to 7% growth. It expects adjusted earnings per share of $3.20 to $3.50, up from the prior expectation of $3.15 to $3.50 above the $3.11 consensus estimate.
Wissink rated the stock a Hold with a price target of $22. Though she was highly encouraged by the company’s news, she said she is looking for a series of quarters that reinforces a growth and margin uplift to justify a higher valuation and estimate upside potential.
The company was a Barron’s stock pick earlier this year. Other analysts feel the same optimism for semi-luxury clothing moving forward.
“We believe Nordstrom is positioned to gain share and drive profitable growth as consumers resume activities, including social events, travel, and return to work. We note merchandising challenges for this dynamic environment, but we believe fashion categories should do well in reopening,” Guggenheim analyst Robert Drbul wrote in a research note. He rates the stock a Neutral with an undisclosed price target.
Write to Logan Moore at [email protected]
