Story updated at 9:45 a.m. to reflect market activity.
Nordstrom fell 0.3% to $59.24 in mornign trading.
The analyst firm removed its price target for the retailer, which was previously set at $65. The downgrade comes after Nordstrom issued guidance toward lower margins in upcoming quarters.
Seprately, TheStreet Ratings team rates NORDSTROM INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NORDSTROM INC (JWN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JWN's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 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.
- Net operating cash flow has increased to $171.00 million or 26.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -21.17%.
- NORDSTROM INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORDSTROM INC increased its bottom line by earning $3.56 versus $3.15 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $3.56).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- You can view the full analysis from the report here: JWN Ratings Report