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On Tuesday, Citi updated its outlook on Nordstrom Inc . (NYSE:JWN) stock, increasing the price target to $23.00 from $22.00 while maintaining a Neutral rating on the stock. The revision comes as the analyst anticipates third-quarter earnings per share (EPS) to surpass the consensus estimate.
Citi projects an EPS of $0.24, compared to the consensus of $0.22, attributing this to a projected sales increase of 3.0% versus the consensus of 0.9%.
The analyst noted that Nordstrom did not provide quarterly guidance, but Placer foot traffic trends revealed a significant uptick in visits to Nordstrom's full-line stores in the third quarter of 2024, with a 4.1% increase compared to a mere 0.4% in the second quarter. This is despite the timing of the Anniversary Sale, which positively impacted the second quarter while potentially detracting from the third.
Citi expects Nordstrom's management to adjust its full-year 2024 EPS guidance to a range of $1.85 to $2.05, an increase from the prior guidance of $1.75 to $2.05 and above the consensus estimate of $1.92.
The analyst believes that the potential for a deal is higher than usual due to the current $23 pending bid on the company's stock, which is near its trading price, and the limited external financing required—only $250 million—to fund the offer.
With the pending bid providing some level of downside protection for the stock, Citi sees the risk/reward balance as neutral heading into the earnings call. The update suggests that the firm views the current offer as a stabilizing factor for Nordstrom's stock value in the near term.
In other recent news, Nordstrom Inc. has been a focal point of significant developments. The company's second-quarter revenue saw a 3.2% increase, with earnings per share (EPS) reaching $0.96, surpassing analysts' projections of $0.71. This positive performance is attributed to improved gross margins, which rose by 155 basis points to 36.6%, and strong full-price sales.
Simultaneously, the Nordstrom family, along with Liverpool, proposed a private buyout of the company at $23 per share, a move that could potentially reshape the company's ownership structure. The proposal is currently being reviewed by a special committee of independent directors. Analysts from TD Cowen maintained a Hold rating on Nordstrom, while KeyBanc Capital Markets kept its Overweight rating.
Furthermore, Nordstrom's Rack brand has been a significant contributor to the company's growth, with plans to open 12 more Rack stores by the end of the year. These are the recent developments surrounding Nordstrom Inc., providing investors with an updated perspective on the company's standing in the market.
InvestingPro Insights
Nordstrom's financial landscape, as revealed by InvestingPro data, aligns with Citi's optimistic outlook. The company's P/E ratio of 12.79 suggests a relatively attractive valuation, which could support the increased price target. Additionally, Nordstrom's revenue of $14.97 billion for the last twelve months as of Q2 2025 indicates a solid financial foundation, with a modest revenue growth of 1.02% over the same period.
InvestingPro Tips highlight that Nordstrom's net income is expected to grow this year, corroborating Citi's projection of higher-than-consensus EPS. The company's profitability over the last twelve months further supports this positive outlook. Interestingly, the stock's high return over the last year, with a 53.92% price total return, reflects growing investor confidence that aligns with the analyst's upgraded stance.
For investors seeking a deeper understanding of Nordstrom's potential, InvestingPro offers 6 additional tips, providing a more comprehensive analysis of the company's financial health and market position.
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