Cowen Cuts Price Target as Nordstrom's (JWN) Weak Traffic Continue Through 4Q
Cowen maintained an Outperform rating on Nordstrom (NYSE: JWN), and cut the price target to $53.00 (from $55.00), following the company's 4Q earnings report. JWN provided initial FY16 EPS guidance of $3.10-3.35. This EPS guide implies FY16 EPS growth of -6% to +1% y/y, but it does not factor in future share repurchases. Management did not provide 1Q guidance, but indicated that 1H EPS will decrease ~30% y/y as the impact of the credit receivable sale, growth investments, and the shift of the anniversary sale into 3Q weigh on 1H results.
Analyst Oliver Chen commented, "Weak traffic from Aug. continued through 4Q causing weak comps, significant GM pressure (-184bps y/y) & cautious FY16 outlook with EPS -6% to +1% y/y & comps Flat to +2% (lowest level since '09). We maintain Outperform based on inexpensive entry-point for best-of-breed dept. store, but acknowledge fundamentals choppy. Lower PT to $53 (was $55) on ~15x '17 EPS."
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Shares of Nordstrom closed at $52.72 yesterday.