Credit Suisse Downgrades Nordstrom (JWN) to Neutral

Credit Suisse downgraded Nordstrom (NYSE: JWN) from Outperform to Neutral with a price target of $76.00 (from $85.00).

Analyst Michael Exstein said while they continue to like long-term prospects, the inflection point for leveraging returns in the intermediate term appears pushed out.

"Our analysis of the company's 2015-2019 capital spending plan suggests much higher capital spending levels going forward," Exsteins said. "Even after the expected peak in '15E at $1.2 bn, we expect annual capex above $800 mn into '18E – well above the $450-500 mn range last seen in '12. The primary drivers for elevated capital spending are continued Rack expansion in the US, higher than expected full-line openings in the US, and significantly higher IT spending (primarily due to an additional fulfillment center in '17-18). This is likely to continue pressuring returns. The question for the company remains - are investments in 5-year dilutive "generational" projects now behind it, or are there more such projects to come?"

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 $74.28 yesterday.

You May Also Be Interested In

• BMO Capital Resumes Global Net Lease (GNL), Upgrades to Outperform
• JPMorgan Downgrades Amcor Plc. (AMCR) to Neutral
• ICICI Securities Starts Cemindia Projects (CEMPRO:IN) at Buy (1)