Nordstrom Downgraded Ahead of Holiday Shopping Season

UBS is skeptical about Nordstrom's earnings

Managing Editor
Oct 30, 2019 at 9:52 AM
facebook twitter linkedin

The shares of Nordstrom, Inc. (NYSE:JWN) are down 3% to trade at $35.98 today, after UBS downgraded the retailer to "sell" from "neutral." While the analyst in coverage kept a $30 price target, they warned that a weak holiday shopping season and tariffs could weigh on the company's earnings. Nordstrom reports third-quarter earnings after the close on Thursday, Nov. 21.

Since bottoming at $25 on Aug. 15, JWN had gained 48% through yesterday's close. However, that rally stalled near the shares' 200-day moving average, and the site of an earnings-induced bear gap from May.

Calls have been growing in popularity during JWN's recent pop. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.37 ranks in the 83rd annual percentile, indicating the rate of call buying relative to put buying has been quicker than usual.

However, there's a chance some of those calls could be a result of short sellers seeking an options hedge against any additional upside. That's because 30.5% of JWN's total available float is sold short, which accounts for 6.5 days of buying power, at the stock's average pace of trading.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners