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.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners