An analyst sees good growth prospects for Nordstrom Inc. (JWN)

Nordstrom Inc. (NYSE: JWN) stock fell -4.64% on Thursday to $15.40 against a previous-day closing price of $16.15. With 3.9 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.94 million shares. The 52-week range on JWN shows that it touched its highest point at $27.72 and its lowest point at $14.02 during that stretch. It currently has a 1-year price target of $18.36. With its current market cap of 2.59 billion, JWN has annualized dividend of $0.76 while the current yield stands at 4.94%. Beta for the stock currently stands at 2.22.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of JWN was down-trending over the past week, with a drop of -4.17%, but this was up by 0.20% over a month. Three-month performance dropped to -19.79% while six-month performance fell -32.01%. The stock lost -25.53% in the past year, while it has lost -4.58% so far this year. A look at the trailing 12-month EPS for JWN yields 1.51 with Next year EPS estimates of 1.96. For the next quarter, that number is 0.48. This implies an EPS growth rate of 38.00% for this year and 3.81% for next year. EPS is expected to grow by 10.53% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -11.80%.

Float and Shares Shorts:

At present, 160.10 million JWN shares are outstanding with a float of 97.30 million shares on hand for trading. On May 14, 2023, short shares totaled 21.44 million, which was 13.28% higher than short shares on Apr 13, 2023. In addition to Mr. Erik B. Nordstrom as the firm’s CEO & Director, Mr. Peter E. Nordstrom serves as its Pres, Chief Brand Officer & Director.

Institutional Ownership:

Through their ownership of 64.10% of JWN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 46.87% of JWN, in contrast to 27.87% held by mutual funds. Shares owned by individuals account for 25.27%. As the largest shareholder in JWN with 6.25% of the stake, The Vanguard Group, Inc. holds 10,007,401 shares worth 10,007,401. A second-largest stockholder of JWN, BlackRock Fund Advisors, holds 9,144,632 shares, controlling over 5.71% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in JWN, holding 5,083,663 shares or 3.17% stake. With a 2.18% stake in JWN, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 3,496,805 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 1.86% of JWN stock, is the second-largest Mutual Fund holder. It holds 2,971,072 shares valued at 45.93 million. Vanguard Small Cap Index Fund holds 1.57% of the stake in JWN, owning 2,515,610 shares worth 38.89 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jan 27, 2023, JWN reported revenue of $3.57B and operating income of $73.00M. The EBITDA in the recently reported quarter was $272.00M and diluted EPS was $0.13.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for JWN since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With JWN analysts setting a high price target of $23.00 and a low target of $12.00, the average target price over the next 12 months is $17.67. Based on these targets, JWN could surge 49.35% to reach the target high and fall by -22.08% to reach the target low. Reaching the average price target will result in a growth of 14.74% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded JWN stock several times over the past three months with 5 Buys and 7 Sells. In these transactions, 21,086 shares were bought while 26,220 shares were sold. The number of buy transactions has increased to 13 while that of sell transactions has risen to 20 over the past year. The total number of shares bought during that period was 48,346 while 123,569 shares were sold.

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