Nordstrom Slumps, Targets Slashed After Weak Holiday Sales

(Bloomberg) -- Nordstrom Inc. shares sank on Wednesday, one day after the department-store chain gave an update to its holiday sales that were seen as disappointing, prompting a number of analysts to lower their price targets and at least two downgrades.

Goldman Sachs was particularly bearish on the news, downgrading the stock and sharply lowering its target price. “In short, we got this call wrong,” it admitted to clients in a note.

The stock dropped as much as 8.9 percent, though it last traded down 6.6 percent on the day. Shares were on track for their biggest decline in two months, a sell-off that took Nordstrom to its lowest level since November 2017. At current levels, the stock is down more than 30 percent from a November peak.

Nordstrom Slumps, Targets Slashed After Weak Holiday Sales

Here’s what analysts are saying:

Goldman Sachs (Alexandra Walvis)

Has “fading confidence in the outlook for the core department store business, and see choppy gross margins as likely offsetting good news on costs as the company cycles generational investments.”

Slashes price target to $50 from $73 “to reflect our lack of conviction on an upward inflection in full-price execution, incremental concern on the high income and tourist consumer, and recent financial market weakness.” Goldman’s previous target had been only slightly below the Street-high view of $75.

Downgrades Nordstrom to neutral from buy and removes it from conviction list.

JPMorgan (Matthew Boss)

Downgrades stock to underweight from neutral and lowers price target to $41. According to Bloomberg data, it had been $51.

The “the traffic-led material deceleration at Full-line doors was abrupt and broad-based across categories and regions,” and it came “despite a robust macro/consumer economic backdrop.”

“Looking ahead, we are concerned trends get worse before better.”

Deutsche Bank (Paul Trussell)

Getting an update was unexpected, but the weakness of the numbers was not.

The results “reflected weaker than expected full-line and solid off-price trends.”

Price target cut to $62 from $64.

Piper Jaffray (Erinn Murphy)

“Some of the tailwinds of 2018’s strong North American macro are nearing an end & geo-political uncertainty rises; dept. stores continue to have their structuring challenges & we remain concerned on the overall dept. store group into 2019.”

Lowers price target from $47 to a Street-low $43.

©2019 Bloomberg L.P.