4 Nordstrom Analysts React To Q3 Earnings As Retail Stock Continues Its Descent

Shares of Nordstrom Inc JWN were nosediving Wednesday, after the retailer reported its quarterly results.

BofA Securities On Nordstrom

Analyst Lorraine Hutchinson maintained an Underperform rating and $15 price target.

“While 3Q earnings beat our estimate on slightly better sales, we continue to view the 4Q guidance as optimistic and remain discouraged by the struggles at Rack,” the analyst said. 

“Sales decelerated in late October through early November due to unseasonably warm weather, consistent with commentary from other retailers, and potentially delayed holiday shopping,” she added.

KeyBanc Capital Markets On Nordstrom

Analyst Noah Zatzkin reiterated an Overweight rating and $30 price target.

“JWN continues to make progress on its inventory position (+0.5% y/y), positioning JWN well for 4Q, and the Company expects to end the year with clean inventory, which we think will position JWN well heading into FY23 relative to many peers,” the analyst said. 

“We remain confident in management's ability to improve Rack performance as JWN makes progress optimizing brand mix, and maintain that JWN possesses LT margin opportunity via supply chain initiatives,” he added.

Check out other analyst stock ratings.

Telsey Advisory Group On Nordstrom

Analyst Dana Telsey reaffirmed a Market Perform rating and $25 price target.

“The earnings result reflected stronger topline and gross margin performance, offset by a higher SG&A ratio,” Telsey stated. “JWN called out continued weakness across its lower income consumers, while its higher income consumers were more resilient on a sequential basis,” she added.

“Gross margin contracted 190 bps YoY to 33.2%, as compared to consensus of down 310 bps YoY to 32.0%, driven by increased markdowns on clearance merchandise,” the analyst further mentioned.

Credit Suisse On Nordstrom

Analyst Michael Binetti maintained a Neutral rating while reducing the price target from $21 to $20.

“Importantly, we struggle to see how JWN will achieve its implied 7.9% to 9.1% EBIT margin in 4Q,” Binetti said. “The low end of that guidance would be the highest 4Q margin in any quarter since 2016, and every quarter this year so far has been below the same quarter in 2016-2019,” he added.

“Further, with another $100m of incremental markdowns in 4Q to clear inventory, we think JWN’s target to get flat YOY GM for the year will be a stretch,” the analyst further wrote.

JWN Price Action: Shares of Nordstrom had declined by 6.4% to $21.21 midday Wednesday. 

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