Nordstrom (JWN) Plunges More Than Broader Markets: What You Need to Know
This story originally appeared on Zacks
Nordstrom (JWN) closed at $23.21 in the last trading session, marking a -1.98% move from the previous day. That move lagged the S&P 500’s 1.81% daily loss. Meanwhile, the Dow Jones lost 1.47% and the tech-heavy Nasdaq lost 0.51%.
Prior to today’s trading, shares of the department store operator had gained 1.98% in the past month. This outpaced the retail and wholesale sector’s 2.51% loss and the S&P 500’s 1.84% loss during that period.
Investors are hoping for Nordstrom’s strength as it approaches its next earnings release. On that day, Nordstrom is expected to report earnings of $1.05 per share, which would represent 400% year-over-year growth. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $4.41 billion, up 21.11% from the year-ago period.
Investors might also notice recent changes in analyst estimates for Nordstrom. Recent revisions tend to reflect the latest short-term trading trends. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated to short-term stock prices. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system is proven and externally audited for outperformance, with #1 stocks returning an average of +25 % per year since 1988. The Zacks Consensus EPS estimate has remained flat over the past month. Nordstrom currently has a Zacks rank of #5 (high sell).
Digging into the valuation, Nordstrom currently has a Forward P/E ratio of 11.81. This valuation marks a premium to the sector’s average Forward P/E of 11.54.
It should also be noted that JWN currently has a PEG ratio of 1.97. This popular measure is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. The Retail – Apparel & Footwear industry currently had an average PEG ratio of 0.76 as of yesterday’s close.
The Retail – Clothing and Footwear industry is part of the Retail – Wholesale sector. This industry currently has a Zacks Industry Rank of 181, which places it in the bottom 30% of all 250+ industries.
The Zacks Industry Ranking assesses the strength of our individual industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and more, at Zacks.com.
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