Nordstrom shares up 1.7% premarket as KeyBanc upgrades to equivalent of buy

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Nordstrom Inc. shares rose 1.7% in premarket trade Wednesday, after KeyBanc upgraded the stock to overweight, the equivalent of buy. Analysts led by Edward Yruma said they came away from a meeting with co-chief executive Erik Nordstrom and chief financial officer Anne Bramman confident that the department store chain is prepared to transition its asset base as e-commerce continues to grow and that it is in two “fundamentally attractive” sectors of the softlines retail: premium and office price. “We expect JWN to continue to close three to four full-line
stores annually, although at this stage, the entire fleet is four-wall cash flow positive,” Yruma wrote in a note to clients. “We are particularly constructive on the Nordstrom Local strategy in LA and we see significant opportunities to open Locals and regional e-comm distribution centers, which should help drive market share gains and, over time, allow JWN to shrink its physical footprint.” KeyBanc views Nordstrom’s e-commerce and Nordstrom Rack discount chain as under-appreciated assets, noting the company has built $4.6 billion in e-commerce sales, equal to 30% of revenue. On a standalone basis, that would make it one of the largest global apparel e-commerce retailers, said the note. KeyBanc set a $55 price target for the stock, equal to about 25% above its current trading level. Shares have fallen 11% in the last 12 months, while the S&P 500 has gained 8%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit for more information on this news.