Why Investors Should Steer Clear of Nordstrom Stock

JWN has shed more than 46% in the last nine months

facebook twitter linkedin

Luxury department retailer Nordstrom, Inc. (NYSE:JWN) is off 0.4% at $21.41 this morning. The equity has struggled with a ceiling at the $24 level since early January, after a mid-November rally to the $36 area was followed by a number of bear gaps that brought the equity to a Dec. 13, two-year low of $18.94. JWN has also faced overhead pressure at the 60-day moving average, and has shed 46.1% in the last nine months.

JWN 60 Day

Analysts are pessimistic towards Nordstrom stock, with nine of the 11 in question calling it a tepid "hold" or worse. Meanwhile, the 12-month consensus target price of $25.13 is a 17.1% premium to current levels, leaving the security ripe for price-target cuts. Shorts are piling on, too, with short interest up 6.5% in the last two reporting periods. Now, the 19.74 million shares sold short make up a massive 17.7% of the JWN's available float.

The options pits lean firmly bullish, however. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Nordstrom stocks sports a 50-day call/put volume ratio of 2.35 that sits higher than 81% of readings from the past year. This means longs calls are being picked up at a much quicker-than-usual clip. 

From a fundamental point of view, Nordstrom stock offers very little security, and virtually no consistency. JWN holds just $262 million in cash and $5.21 billion in total debt, which is over $1.5 billion more than the retailer's market cap of $3.4 billion.

Although Nordstrom’s trailing 12-month revenues have increased 30% since 2021, this number is still down 12% over the past three years. This is due to back-to-back years of sales declines between 2019 and 2021. Similarly, JWN's net income is also down a jaw-dropping 98% since 2019.

Meanwhile, Nordstrom stock offers a compelling valuation, with the stock trading at a forward price-earnings ratio of 9.84, as well as a a price-sales ratio of 0.24. However, the reward potential simply does not justify the risk involved with JWN’s fundamentals.


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!