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Nordstrom (JWN) Up to Strong Buy: What's Driving the Stock?
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On Sep 10, 2016, Zacks Investment Research upgraded fashion specialty retailer, Nordstrom Inc. (JWN - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
One of the leading players in the specialty retail sector, Nordstrom is an appealing choice for consumers. The company runs in coherence with the evolving retail industry that is focused on offering maximum choices to customers to enhance their shopping experience.
In this regard, the company continues to efficiently allocate a major portion of its capital toward its multichannel growth strategy focused on improving its merchandise offerings; developing IT infrastructure to enhance web and mobile experience of customers; renovating stores with a modern look and developing fulfillment centers to enable speedy delivery to online customers. We believe that these initiatives are the company’s primary growth drivers.
Talking about growth, Nordstrom emerged strong in second-quarter fiscal 2016, wherein its bottom line topped the Zacks Consensus Estimate, driven by solid expense control and its Anniversary sale this year, which was one of the company’s splendid events in a long time.
In fact, the success of this event also helped the company to arrive at a clean inventory status for the second half of the fiscal year. Taking these factors and the upbeat bottom-line results into account, management raised its earnings outlook for fiscal 2016. It now envisions fiscal 2016 earnings per share in the range of $2.60–$2.75, up from $2.50–$2.70 projected earlier. Also, management had earlier predicted that the shift of its great Anniversary sale is likely to boost third-quarter comps.
Notably, the aforementioned factors led to a 12.4% jump in Nordstrom’s stock price, alongside boosting its earnings estimates for the third quarter and fiscal 2016, over the past one month. As analysts turned more constructive on the stock’s future performance, the Zacks Consensus Estimate jumped 8.2% to 53 cents for the third quarter and 6.7% to $2.71 for fiscal 2016 over the past 30 days.
Additionally, the company has been persistently focusing on its store-expansion strategy, which is not only expected to attract customers but also augment the top line via synergies across other channels. Further, management plans to cut costs through a phased approach and eliminate about 300–400 jobs, which if concluded on time, will likely generate cost savings worth nearly $60 million in fiscal 2016. We believe that all these efforts, combined with Nordstrom’s advancement in the technology space will help it to deliver sustainable growth over the long term.
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Nordstrom (JWN) Up to Strong Buy: What's Driving the Stock?
On Sep 10, 2016, Zacks Investment Research upgraded fashion specialty retailer, Nordstrom Inc. (JWN - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
One of the leading players in the specialty retail sector, Nordstrom is an appealing choice for consumers. The company runs in coherence with the evolving retail industry that is focused on offering maximum choices to customers to enhance their shopping experience.
In this regard, the company continues to efficiently allocate a major portion of its capital toward its multichannel growth strategy focused on improving its merchandise offerings; developing IT infrastructure to enhance web and mobile experience of customers; renovating stores with a modern look and developing fulfillment centers to enable speedy delivery to online customers. We believe that these initiatives are the company’s primary growth drivers.
Talking about growth, Nordstrom emerged strong in second-quarter fiscal 2016, wherein its bottom line topped the Zacks Consensus Estimate, driven by solid expense control and its Anniversary sale this year, which was one of the company’s splendid events in a long time.
In fact, the success of this event also helped the company to arrive at a clean inventory status for the second half of the fiscal year. Taking these factors and the upbeat bottom-line results into account, management raised its earnings outlook for fiscal 2016. It now envisions fiscal 2016 earnings per share in the range of $2.60–$2.75, up from $2.50–$2.70 projected earlier. Also, management had earlier predicted that the shift of its great Anniversary sale is likely to boost third-quarter comps.
Notably, the aforementioned factors led to a 12.4% jump in Nordstrom’s stock price, alongside boosting its earnings estimates for the third quarter and fiscal 2016, over the past one month. As analysts turned more constructive on the stock’s future performance, the Zacks Consensus Estimate jumped 8.2% to 53 cents for the third quarter and 6.7% to $2.71 for fiscal 2016 over the past 30 days.
NORDSTROM INC Price and Consensus
NORDSTROM INC Price and Consensus | NORDSTROM INC Quote
Additionally, the company has been persistently focusing on its store-expansion strategy, which is not only expected to attract customers but also augment the top line via synergies across other channels. Further, management plans to cut costs through a phased approach and eliminate about 300–400 jobs, which if concluded on time, will likely generate cost savings worth nearly $60 million in fiscal 2016. We believe that all these efforts, combined with Nordstrom’s advancement in the technology space will help it to deliver sustainable growth over the long term.
Stocks to Consider
Other well-ranked stocks in the Retail-Apparel/Shoe industry include The Children's Place, Inc. (PLCE - Free Report) , Tilly's, Inc. (TLYS - Free Report) and Urban Outfitters Inc. (URBN - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>