Options Traders Respond to Nordstrom's Earnings Report

The luxury retailer posted third-quarter results after yesterday's close

Deputy Editor
Nov 23, 2022 at 11:57 AM
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Nordstrom, Inc. (NYSE:JWN) stepped into the earnings confessional after the close yesterday, and options traders are taking note. The department store retailer posted third-quarter earnings of 20 cents per share and revenue of $3.55 billion, both of which beat Wall Street's estimates; however, the company cut its profit outlook for the fiscal year ending January due to slowing sales. 

In the options pits, 17,000 calls and 15,000 puts have crossed the tape so far today, for total volume that's four times the intraday average. New positions are being opened at the most popular contract, which is the 11/25 21-strike call. Not far behind is the 20-strike put in the same weekly series, both of which expire at the close on Friday.

Looking back further, options traders have favored puts. This is per JWN's Schaeffer's put/call open interest ratio (SOIR) of 1.35, which sits in the 85th percentile of its annual range.

Credit Suisse cut Nordstrom stock's price target to $20 from $21 after the earnings event. The consensus 12-month target price of $21 is a slim 2.2% discount to JWN's current perch, and 11 of the 14 covering brokerages rate the shares a "hold" or worse.

At last check, Nordstrom stock is 5.9% lower to trade at $21.30. The security's most recent rally fell short of the $23 region, while the descending 180-day moving average also capped additional gains. Longer term, JWN sports a 32.4% year-over-year deficit.

JWN Chart November 232022

 

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