3 Retail Stocks Garnering Bearish Analyst Attention

Nordstrom's lackluster same-store sales sparked price-target cuts from at least 7 brokerage firms

Nov 10, 2017 at 9:57 AM
facebook twitter linkedin


Analysts are weighing in on shoe retailers Finish Line Inc (NASDAQ:FINL) and Foot Locker, Inc. (NYSE:FL), as well as department store Nordstrom, Inc. (NYSE:JWN). Here's a quick roundup of today's bearish brokerage notes on FINL, FL, and JWN stocks.

Cowen Downgrades FINL Stock on 'Skyrocketing' Promotions

Finish Line stock is down 12.3% to trade at $8.77, after Cowen downgraded the stock to "underperform" from "market perform," and cut its price target to $7 from $10, citing the impact of the company's "skyrocketing" promotions on margins and its relationships with brands. "Aggressively undercutting Nike, Adidas, and Under Armour on price is not sustainable," the brokerage firm said.

FINL shares have taken a tumble this year, losing more than half their value, and touching an eight-year low of $6.90 in late August. As a result, short interest peaked at an all-time high of 11.94 million shares in mid-September. Although short interest has since fallen to 9.25 million shares, it still accounts for more than 23% of the security's total available float, or 6.1 times its average daily trading volume.

Foot Locker Shares Tick Lower After Price-Target Cut

Shares of sector peer Foot Locker are down 0.6% at $30.42, after Cowen cut its price target to $33 from $37. Down 57% year-to-date -- due to two massive post-earnings bear gaps -- FL shares touched a five-year low of $28.42 on Wednesday. What's more, Foot Locker will report earnings next Friday, Nov. 17. However, FL stock tends to outperform in the November-through-April period, averaging a gain of 8.2% over the past 10 years, according to recent data from Schaeffer's Senior Quantitative Analyst Rocky White.

In light of the shares' decline, though, short-term options traders are pouncing on FL puts. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.50 ranks at an annual high, meaning near-term traders haven't been more put-heavy in the past 12 months.

Lackluster Sales Sparks Price-Target Cuts for Nordstrom Stock

Nordstrom shares are trading 0.4% lower at $39.87, after the company reported lower-than-expected same-store sales, which sparked a slew of price-target cuts from at least seven brokerage firms, including J.P. Morgan Securities (to $33), Deutsche Bank (to $41), and Susquehanna (to $43). The retailer attributed its lackluster sales to recent hurricane damage, which it expects will continue to hurt full-year sales and earnings.

After trading sideways for most of 2017, JWN shares gapped lower in October, after the retailer suspended its attempts to go private. Now down 16% year-to-date, and fresh off an annual low of $37.79 on Wednesday, the security could be vulnerable to additional downgrades and price-target cuts in the near term, as five analysts following the stock rate it a "buy" or "strong buy."


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners