UPDATE: Jefferies Starts Nordstrom (JWN) at Buy
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Jefferies analyst Stephanie Wissink initiates coverage on Nordstrom (NYSE: JWN) with a Buy rating, PT $48.00.
The analyst comments "We see the potential for the company to meld a legacy of curation, forward edge fashion, with unique partnership models and data-powered maximization of local markets. In addition, the off-price business represents a significant growth contributor. While there is execution risk, we expect: 1) permanent share shifts by channel, using 50/50 stores/digital go forward split; 2) merch mix among owned/PL increases, wholesale decreases and higher EBIT%, working cap light partnerships increases substantially; 3) contrib. from growth in off-price returning to pre-pandemic avg/store volume; and 4) cost tightening in 2020 lowers the leverage threshold, contributes 1/3 of EBIT% advancement. JWN guided 25%+ FY21 sales growth, digital ~50% of mix, and 3% EBIT margin. Med-term, return to '19 revenue run rate ($15.5B) in FY23/24 while rebasing the cost structure supports 6% EBIT margin vs. 5.1% in '19."
Shares of Nordstrom closed at $37.40 yesterday.
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