Nordstrom’s stock is on the rise. Shoppers are again looking for high-end clothing.
Fashionistas’ shopping habits are back in full swing, say analysts, who say it’s a good thing for
as consumers look to buy dressier clothes to fit their post-Covid-19 lifestyle.
“More customers buy for social events, travel and return to the office and when blanketed in exposure to the high-end consumer, more insulated from the impacts of inflation, JWN is well positioned,” wrote the Jefferies analyst Stephanie Wissink in a research note Wednesday.
“We are very encouraged by the direction and the degree of improvement; given that the thesis has been bumpy, we are looking for a series of quarters that reinforce growth and margin expansion to justify a higher valuation and estimate upside potential,” she added.
The stock (ticker: JWN) rose 6% in premarket trading to $21.81, after the department store raised its financial guidance for the second time this year. Shares have fallen 13% since the start of the year, while
For the full year, Nordstrom now expects total revenue growth, which includes retail sales and credit card revenue, of 6% to 8% from a year ago, versus a previous range of 5% to 7%. It expects adjusted earnings per share of $3.20 to $3.50, up from the earlier expectation of $3.15 to $3.50 above the consensus estimate of 3 .11$.
Wissink has priced the stock as Hold with a price target of $22. Although she was very encouraged by the company news, she said she was looking for a series of quarters that reinforce growth and increased margins to justify a higher valuation and estimate the upside potential.
The company was a Barrons stock selection earlier this year. Other analysts feel the same optimism for the future of semi-luxury clothing.
“We believe Nordstrom is positioned to gain market share and drive profitable growth as consumers resume activities, including social events, travel and returning to work. We note merchandising challenges for this dynamic environment, but believe fashion categories should reopen well,” Guggenheim analyst Robert Drbul wrote in a research note. It rates the stock as neutral with an undisclosed price target.
Write to Logan Moore at [email protected]