Nordstrom Inc. (JWN) Michael Dietrich 11/2/11. Business Summary Retailer that offers apparel, shoes, cosmetics, and accessories for men and women. 222.

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Presentation transcript:

Nordstrom Inc. (JWN) Michael Dietrich 11/2/11

Business Summary Retailer that offers apparel, shoes, cosmetics, and accessories for men and women. 222 stores. 117 full line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure and bond store, and 1 clearance store. 90% revenue comes from its retail stores, the other from website, catalog, and private label credit card.

Key Statistics Recent Price: $50.52Div.& Yield:.92 (1.80%) Fair Value: $43.00 Consider Buy:$25.80 Consider Sell:$66.70 Market Cap:$10.69B P/E (ttm):16.71 EPS (ttm):3.01

Key Statistics Cont.

1 Year Chart

5 Year Comparative Chart

Stock Checklist Criteria Requirements:CompanyIndustryGood / Bad Solvency and Financial Leverage Ratios:3.69 Current Ratio > good Debt Ratio < Industry Average bad Efficiency Ratios: Total Asset Turnover > Industry Average1.36 good Inventory Turnover > Industry Average good Profitability Ratios: Net Profit Margin > Industry Average bad Return on Asset (ROA) > Industry Average bad Return on Equity (ROE) > Industry Average good Growth Ratio (5 years): Historical EPS Growth > Industry Average bad Historical Revenue Growth > Industry Average bad Projected EPS Growth >10%* and > industry Average bad Other Informative Data: P/E P/B PEG1.2N/A Fair Value Estimate Current Price (10/17/2011) Purchase Price Dividend$0.76 Dividend Yield >2%**1.83%2.16

SWOT (Strengths) They have managed inventory levels during the economic downturn Added an IT department Online sales continue to grow

SWOT(Weakness) Credit card business adds an element of risk for the company Sells mainly discretionary goods, exposed to economic swings

SWOT(Opportunities) 122 stores domestically so still room for expansion Mobile check out devices

SWOT(Threats) High competition Saks offers affordable luxury items Macy’s upgrading its merchandise assortment Consumer Spending (cyclical)

Wall St. Recommendations

Morningstar Recommendations Buy: 12 Outperform:2 Hold: 5 Underperform: 0 Sell: 1