On Tuesday, Citi reiterated its Neutral rating on Nordstrom (NYSE:JWN) stock, with a steady price target of $20.00. The firm anticipates that Nordstrom's first-quarter earnings per share (EPS) will surpass the market consensus and align with the company's guidance.
Citi's projections place EPS at -$0.01, compared to the consensus of -$0.07, and expects a break-even result to a slight loss. This forecast is based on the assumption of flat sales, contrasting with a general expectation of a 0.9% increase, though Nordstrom did not provide quarterly sales guidance.
The analysis by Citi suggests that Nordstrom's sales have gained momentum in the first quarter, especially in its Rack brand, as indicated by positive shifts in both Placer data and Rack sales in the fourth quarter.
The expectation is that Nordstrom's management will maintain its full-year 2024 EPS guidance of $1.65 to $2.05, which is in line with the consensus estimate of $1.81.
Additionally, the company may lean towards the upper end of its previous comparable sales forecast, which ranged from a 1% decline to a 2% increase, buoyed by the Rack brand's performance.
Another potential influence on Nordstrom's stock could stem from discussions around a potential management buyout. Although this was reported by a news outlet on March 18, 2024, there has been no confirmation from Nordstrom's management regarding such a transaction.
InvestingPro Insights
As investors look towards Nordstrom's (NYSE:JWN) upcoming earnings report with anticipation, insights from InvestingPro reveal a multifaceted picture of the company's financial health and stock behavior. Nordstrom's market capitalization stands at $3.44 billion, and the stock has experienced a substantial 45.04% price increase over the last six months, aligning with Citi's observations of sales momentum, particularly in the Rack brand. This uptick is also supported by a year-to-date return of 15.65%.
Despite the volatility in stock price movements, analysts are optimistic about Nordstrom's profitability, with the company trading at a forward Price / Earnings (P/E) ratio of 9.45, which is lower than the current P/E ratio of 25.7, indicating expectations of increased earnings. Furthermore, Nordstrom's Price / Book ratio stands at 4.06, which could suggest the stock is trading at a premium relative to its book value. This is an important metric for investors considering the potential management buyout discussions. With the company's next earnings date scheduled for May 30, 2024, these metrics will be crucial for investors to watch.
For those seeking deeper analysis, there are additional InvestingPro Tips available on the platform, which can provide further guidance on Nordstrom's stock. For example, while the company is expected to be profitable this year, it is also trading at a high Price / Book multiple, which could influence investment decisions. To access these insights and more, visit https://www.investing.com/pro/JWN and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 5 more InvestingPro Tips available that could help investors make more informed decisions.
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