Publish date:

Is Wall Street Finally (and Reluctantly) Starting to Sour on Nordstrom?

The Fried-day recap:

Nordy gets knocked:

Several months ago I wrote a

piece critical of

Nordstrom

(NOBE)

for

Fortune

and

TheStreet.com

. No sooner were both published than the Greenberg Effect took hold and Nordstrom's stock gapped up another 20%. The stock subsequently split, giving it a new image on Wall Street. The few analysts who thought Nordstrom faced critical issues were ignored, especially when Nordstrom beat first-quarter earnings estimates. So what if it beat estimates that already been trimmed?

Now, however, it appears even some of Nordy's biggest fans may be having second thoughts. At least for the time being. Yesterday

NationsBanc Montgomery's

Tom Tashjian downgraded the stock to a hold, citing increased competition among department stores. That's part of a larger Montgomery department-store theme. But he also mentioned that California retail markets are starting to feel the brunt of a falloff in Asian tourism. And if sales growth starts to stall, the momentum crowd may start backing off.

Tashjian also cites "limited visibility" to the implementation of new operational practices designed to boost profitability.

What's more, he warned that while management "has expressed comfort" in his second-quarter estimate of 42 cents per share, any weakness in sales this month could cause him to take out the knife.

Just rehash by this column of an analyst's comments? Maybe, but when an analyst like Tashjian downgrades a stock like Nordstrom and talks about a possible cut in his estimates, savvy investors often read between the lines.

Of course, it also makes you wonder what the stock ever did rising in the first place.

When the going gets rough, change the going:

In recent weeks this

column has pointed to the "velvet-gloved hatchet job" by

Robertson Stephens'

gutsy analyst, Andrew Jeffrey. He couldn't quite put the dreaded "s" word on

Black Box Corp.

TST Recommends

(BBOX) - Get Report

, but did the next best thing by lowering it to a long-term attractive. He urged clients to get out of the stock while the getting was good on the basis that the quality of the company's earnings was deteriorating. So, yesterday the company, a direct marketer of networking products, reported revenues and profits substantially below even his estimates and its stock ... rose!

Investors apparently were impressed by CEO Fred Young's comments that Black Box plans to change its business model by acquiring its way into the on-site services business. If all goes well, he said, the change should increase the company's fiscal 1999 U.S. revenue growth by 35% to 40% "and our overall revenue growth to between 20% to 22%."

One question: How does he know this? How can he predict that kind of future? Reminds me of the way fast-food companies used to hype that they planned to open hundreds of restaurants in a given year; they were often lucky to open a fraction of that amount, and those they did open often didn't perform anywhere close to expectations. Black Box officials couldn't be reached, but Jeffrey could. He downgraded the stock to a market perform -- the ole giant wink to sell. He says there's simply too much risk with the plan. "The core business is struggling and now the company is saying this is the way to grow the company," he says.

Maybe the company will be right, and maybe Young really can see the future, but if it isn't and he can't investors could see their money go from a Black Box to a black hole.

Autodesk's answer:

An item

here the other day questioned what makes

Autodesk

(ADSK) - Get Report

so different that it won't preannounce a lousy quarter, and its stock won't take a forced vacation, in the wake of similar action by rivals

Structural Dynamics

(SDRC)

and

Parametric Technology

(PMTC)

. "That's the correct question," says President Eric Herr, whose only quibble is with the conclusion. All three make software for computer-aided design. While Autodesk has the same type of Asian exposure as the others, its Asian exposure has actually been falling. What's more, he says, the company has diversified and is winning business by undercutting Structural and Parametric in price. Does that mean Autodesk won't preannounce? "I'd be very surprised if we had to," Herr says.

No question is too stupid:

Have a question about the workings of the market? This column's new Saturday Money Mailbag, starting next week, will try to provide an answer. Email them to

moneymailbag@thestreet.com. Expect a canned form letter and, if your letter is published, an actual answer. These tips: Keep the questions short and keep them general. And please, no questions seeking personal financial advice

because they won't be answered

!

Herb Greenberg writes daily for TheStreet.com. In keeping with the editorial policy of TSC, he does not own or short individual stocks. He also does not invest in hedge funds or any other private investment partnership. He welcomes your feedback at

herb@thestreet.com. Herb Greenberg also writes the monthly "Against the Grain" column for Fortune.