Nordstrom Inc. Stock Buy Recommendation Reiterated (JWN)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Nordstrom (NYSE:JWN) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+ . The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

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Highlights from the ratings report include:

• JWN's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
• NORDSTROM INC has improved earnings per share by 20.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NORDSTROM INC increased its bottom line by earning $3.15 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $3.15).
• The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Multiline Retail industry average. The net income increased by 15.0% when compared to the same quarter one year prior, going from $127.00 million to $146.00 million.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multiline Retail industry and the overall market, NORDSTROM INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
• The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It operates in two segments, Retail and Credit. The Retail segment offers a selection of brand name and private label merchandise. Nordstrom has a market cap of $11.11 billion and is part of the services sector and retail industry. The company has a P/E ratio of 17, below the S&P 500 P/E ratio of 17.7. Shares are up 4.1% year to date as of the close of trading on Wednesday.

You can view the full Nordstrom Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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For more information on Nordstrom Inc. click any of the following:

• Nordstrom Inc. Stock Price

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• Nordstrom Inc. Ratio Comparison

• Nordstrom Inc. Growth Rates

• Nordstrom Inc. Balance Sheet

• Nordstrom Inc. Cash Flow

• Nordstrom Inc. Income Statement