Nordstrom: Zacks’ Bear of the Day Play

Nordstrom (JWNAnalyst Report) just reported earnings and missed the Zacks Consensus Estimate as well as the Wall Street Consensus Estimate. The stocks has slipped to a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.The Numbers

JWN missed the Zacks Consensus Estimate of $1.17 by $0.05 for a 4.1% negative earnings surprise. Revenues came in a little below expectations at $4.143 billion for a 1.9% negative revenue surprise.

JWN guided to FY17 EPS to a range of $3.10-3.35 and at the time of the earnings report the Zacks Consensus Estimate was calling for $3.51.

Description

Nordstrom is a fashion specialty retailer. As of February 11, 2016, the company operated 323 stores in 39 states. The company was founded in 1901 and is based in Seattle, Washington.

Earnings History

The recent earnings history for JWN is rather weak with four of the last five reports coming below the Zacks Consensus Estimate. The last two reports were misses, with negative earnings surprises of 19% and 4% respectively.

Estimates

The FY2017 Zacks Consensus estimate has been moving lower. The number stood at $3.51 just prior to the most recent earnings miss and is now down to $3.21.

The FY 2018 number also saw a corresponding drop from $3.79 to $3.57 following the miss.

Valuation

JWN trades at a discount to the industry average in terms of forward PE (15.3x vs 22.5) and price to sales (0.6x vs 1.7x). It trades at a wild premium in terms of price to book at 10.4x compared to 5.8x.

Fiscal 2017 is expected to see revenue growth of 4.1%, but that is below the 5.2% industry average. EPS is expected to contract in FY 2017 by 3.7% while the industry average is expected to increase by 9.3%.

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #5 (Strong Sell) we see that estimates are moving higher.

 

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Stocks Under $10, an investor service , where he recommends the stocks in the portfolio.

Brian also runs the brand new Zacks Game Changers where he looks for stocks that are disrupting their industries and reaping big gains.

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