Deutsche Bank Comments on Nordstrom's (JWN) Q1
Get Alerts JWN Hot Sheet
Rating Summary:
6 Buy, 27 Hold, 6 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 1
Join SI Premium – FREE
Deutsche Bank maintained a Buy rating on Nordstrom (NYSE: JWN) and raised its price target to $72.00 (from $67.00). The change follows strong Q1 results.
Analyst Paul Trussell said, "1Q results positively surprised on multiple fronts: (1) JWN announced it is (finally) seeking a financial partner for its CC receivables (see analysis below); (2) SSS accelerated to 3.9% (2.6% in 4Q), overcoming unfavorable weather; (3) SG&A surprisingly leveraged; and (4) JWN repurchased over 3 million shares (not included in guidance). We believe shares have reached a point of inflection with valuation now beginning to reflect the company’s strong growth prospects, best in class online and off-price business segments, and higher end customer base. We are raising our PT to $72 from $67 on fundamentals, with the sale of the CC biz potentially additive by $8 to the stock."
"On page 3-6, we examine the potential value of the credit card sale and believe that a transaction would be materially accretive as cash proceeds are utilized mostly for buybacks. Important items to note: (a) only $300M of debt is currently securitized by the $2.1B in receivables opposed to our 2/14 SOTP assumption of 80%, (b) paying down a considerable amount of debt would take JWN well below its targeted leverage ratio as well as that of peers, and (c) JWN has already outlined its FY14-FY18 capital plans which is able to be fully funded by FCF. If sold for par and ~60% of interest in the portfolio is maintained (using TGT transaction as the comp), we calculate (see Figure 5) $0.47 of EPS accretion which at a multiple of 16x equates to ~$8," he added.
For an analyst ratings summary and ratings history on Nordstrom click here. For more ratings news on Nordstrom click here.
Shares of Nordstrom closed at $61.49 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Canaccord Genuity Downgrades Antofagasta Plc. (ANTO:LN) (ANFGF) to Hold
- Pernod Ricard SA (RI:FP) (PDRDY) PT Raised to EUR152 at Morgan Stanley
- Iberdrola SA (IBE:SM) (IBDRY) PT Raised to EUR13.50 at Morgan Stanley
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Analyst PT ChangeRelated Entities
Deutsche BankSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!