What Wall Street Says About Nordstrom’s Gains

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Following a wave of stellar retail earnings reports,

Nordstrom

second quarter tax results were not enough to convince Wall Street. A JPMorgan analyst said the backdrop might not improve much for the retailer.

Nordstrom stock (ticker: JWN) was down 18% to $ 31.18 during Wednesday’s trading. The S&P 500 Index rose 0.2%. The move wiped out all but 1% of Nordstrom’s earnings so far this year.

Although both earnings and sales exceeded expectations, JPMorgan analyst Matthew Boss downgraded his stock rating to Underweight from Neutral following Tuesday night’s report. Boss set a price target of $ 34 in December 2022. His previous target was a December 2021 target of $ 39.

The boss noted a solid backdrop for Nordstrom’s primary client with a family income of $ 100,000 or more, which includes a personal savings rate in mid-teens, debt-service ratio at most. 40-year low and US household wealth creation of over $ 12 trillion in 2020 – paired with a relatively small amount of promotional activity, has consistently produced disappointing results relative to department store peers. Despite these positive developments, which may be “as good as it gets,” according to Boss, Nordstorm sales were still lower than in the second quarter of 2019.

BMO Capital Markets analyst Simeon Siegel highlighted the 2019 comparison for the stock’s reaction. He wrote that the company’s anniversary sale only exceeded the comparable sale in fiscal 2019 by 1%. He believes the company has made progress in its recovery efforts, but believes the action is already reflecting such efforts. Siegel has a Market Perform rating and a target of $ 28.

BofA Securities analyst Lorraine Hutchinson expects the company’s earnings recovery to lag behind its peers. It maintained an underperformance rating but increased its price target to $ 22 from $ 19. She said the valuation reflects “the company’s low sales and limited margin expansion potential.

“Although Nordstrom and Rack sales improved sequentially, both remained below F19 levels,” she wrote, “a stark contrast to most other retailers who are positively offsetting pre-pandemic levels. “.

Write to Connor Smith at [email protected]