Option Trade 
Nordstrom, Inc. (NYSE:JWN) Calls 
Sunday, August 09, 2015

**OPTION TRADE: Buy the JWN Oct 2015 75.000 call (JWN151016C00075000) at approximately $2.45. Place a protective stop loss at $1.00, and a pre-determined sell at $4.90.

by Ian Harvey

August 09, 2015


Nordstrom, Inc. (NYSE: JWN), a fashion specialty retailer, will report their quarterly earnings this Thursday, 13th August. According to 15 brokerage firm analysts JWN is estimated to earn $0.90 per share.

The 15 Sell-side firms covering the equity are estimating that the stock will reach $76.40 on a short-term basis. The most bullish analyst sees the stock reaching $88.00 while the most conservative target is set at $63.00.

Nordstrom Inc. had had healthy earnings growth over the last several years and relatively strong dividend yields. In addition, there are a couple of positive qualitative factors – an online presence promotes further growth, and the company has good management.

Technical Details

Shares of Nordstrom traded up 0.58% during trading on Friday, hitting $74.91. The company shares have rallied 8.31% in the past 52 Weeks.

Nordstrom has a 52-week low of $64.92 and a 52-week high of $83.16. The firm has a market cap of $14.27 billion and a PE ratio of 20.48. The company’s 50 day moving average is $76.59 and its 200 day moving average is $77.42.


Previous Earnings

Nordstrom last announced its quarterly earnings results on Thursday, May 14th. The company reported $0.66 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.71 by $0.05.

During the same quarter in the prior year, the company posted $0.72 earnings per share. The firm had revenue of $3.12 billion for the quarter, compared to analyst estimates of $3.15 billion. The business’s quarterly revenue was up 9.8% compared to the same quarter last year. On average, equities research analysts predict that Nordstrom will post $3.74 EPS for the current year.

Analysts Opinions

Nordstrom‘s stock had its “hold” rating restated by Brean Capital in a note issued to investors last Thursday.

Also, Nordstrom was upgraded by Zacks from a “sell” rating to a “hold” rating in a note issued to investors on Wednesday, 15th July.

According to Zacks….

“Nordstrom reported lower-than-expected earnings per share for first-quarter 2015 mainly due to expenses related to the Trunk Club acquisition and its ongoing expansion in Canada. Furthermore, the company has been facing downward estimate revisions as it expects earnings per share for the year ahead to get affected by the same factors that dragged down first-quarter results. However, the company’s strong brand image and continuous expansion endeavors remain driving factors. Nordstrom also enjoys a healthy financial status which gives the company the flexibility to reward shareholders and drive future growth. Further, we remain impressed with the company’s practice of keeping up with the evolving retail industry.”

The company has also been the subject of a number of other research reports:-

• JPMorgan Chase & Co. restated a “buy” rating and set a $84.00 target price (up from $82.00) on shares of Nordstrom in a report on Monday, May 18th.

• Cowen and Company reiterated a “sell” rating and set a $85.00 price target on shares of Nordstrom in a report on Wednesday, May 27th.

• Deutsche Bank decreased their target price on shares of Nordstrom from $84.00 to $83.00 and set a “buy” rating on the stock in a research report on Friday, June 19th.

• Finally, Piper Jaffray reissued a “buy” rating and set a $86.00 target price on shares of Nordstrom in a research report on Wednesday, July 22nd.

Two analysts have rated the stock with a sell rating, seven have issued a hold rating and five have given a buy rating to the company’s stock. The company currently has an average rating of “Hold” and a consensus price target of $79.03.

Harvey’s Options Volatility Indicator


Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the JWN Oct 2015 75.000 call (JWN151016C00075000) at approximately $2.45. Place a protective stop loss at $1.00, and a pre-determined sell at $4.90.

”Success is simple. Do what's right, the right way, at the right time.”

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Options traders win because they are successful.

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