Citi Reports On Improved Credit Trends For JWN

Citi is maintaining its Buy rating and its $59 price target on Nordstrom Inc. JWN as the company's April credit data showed improvement. Says Citi, “JWN's monthly credit data showed improvement YOY in April in all three key credit metrics: the monthly payment rate, total delinquencies, and net charge-offs. In addition, all three metrics improved sequentially. For 1Q11, JWN reported total delinquencies of approx. 3.3%, vs. 3.0% in 4Q10 and 4.2% LY, and the net charge-off rate declined in the quarter to 7.0%, vs. 7.2% in 4Q10 and 11.9% LY. As of a result of these trends, management reduced its bad debt allowance by (-$10)M, or approx. 7%, of the total reserve balance. For 2011, we are forecasting a (-$23)M reduction in bad debt reserves.” JWN closed at $47.40 yesterday.