- Netflix (NFLX) and Zions Bancorp (ZION) to outperform from neutral at Credit Suisse.
- Akamai (AKAM) to buy from neutral at Merriman.
- CSX (CSX) to overweight from equal weight at Barclays.
- Nordstrom (JWN) to buy from neutral, WellCare (WCG) to conviction buy from buy and Humana (HUM) to neutral from sell at Goldman.
- E-Commerce China Dangdang (DANG) to overweight from neutral at Piper Jaffray.
- VMware (VMW) to buy from neutral at BofA/Merrill.
- Celanese (CE) to overweight from equal weight at Morgan Stanley.
Nordstrom, the standard in upscale, big-box (big-store) retail, has made it through the Great Recession in good shape. JWN will likely post FY2012 revenue growth of 5-7%, after an 8% rise in FY2011. Nordstrom will stay focused on its most effective brands and prudently deploy capital until store traffic improves as the U.S. economic recovery continues.
Nordstrom (JWN) has the kind of chart that makes you look twice. At first, you see its choppiness and wonder where the heck the stock is going. Then you move in a little closer and notice how the equity might be clearing some resistance levels. Is the retailer getting ready to move higher?
If you go by the reaction to the company's latest earnings report during yesterday's extended-hours session, you'd probably think not. At the time of writing, the stock was down over 2%.
We're well into the quarter now and the earnings reports continue to roll out.
This week, Dell (DELL) highlights a handful of results from tech companies. Analysts surveyed by Thomson Reuters are looking for fourth-quarter earnings of 37 cents per share from the one of the world's top PC purveyors. That's up from 28 cents per share during the same period a year ago. Dell also is expected to report its revenue grew 5.5% year over year to $15.7 billion, for the three months that ended in January.
- Diamond Offshore (DO) to conviction buy from sell and Baker Hughes (BHI) to buy from neutral at Goldman.
- Frontier Communications (FTR) to outperform from market perform at Wells Fargo.
- Syntel (SYNT) to outperform from market perform at Wells Fargo, to buy from hold at Deutsche Bank and to buy from neutral at Janney Capital.
- Kulicke & Soffa (KLIC) and Fiserv (FISV) to outperform from perform at Oppenheimer.
- 3M (MMM) to neutral from underweight and Tyco (TYC) to overweight from neutral at JPMorgan.
- Collective Brands (PSS) and Nordstrom (JWN) to overweight from equal weight, as well as Foot Locker (FL) to equal weight from underweight, at Morgan Stanley.
- Amazon.com (AMZN) to buy from hold at Lazard Capital.
- Yamana Gold (AUY) to outperform from neutral at Credit Suisse.
As outlined in September, retailer Nordstrom Inc. (JWN), first discussed in this space on May 21, 2010, at a price of $38.12, looked a tad low at $28 in late summer, and if you took advantage of the nadir to scoop-up shares, you made the correct move.
Nordstrom uptrended in big way this autumn, is currently traded at/near $43 and the large move makes it perfectly acceptable for those who bought below $30 to take some profits at this stage. All others with a dollar-cost-average above $35, including those who bought in May 2010, have realized a much smaller gain, but remain patient: there's more upside ahead for Nordstrom in 2011.
Even with the bad session, I assume the stock wouldn't be down as much if Wall Street had been impressed by the numbers. According to this item from TheFly, net income of 53 cents per share beat the overall estimate by a penny. That's okay, but guidance doesn't appear to be as acceptable: the market was counting on $2.64 per share for the full fiscal year, but the company says it will probably make somewhere between $2.60 and $2.65 per share.
After bursting through $46 in the spring, the shares fell in bear-hug fashion to about $28.35 -- a nearly 40% swoon.
What triggered the nosedive? A below-consensus 55-cent per share earnings total in the first quarter, and an in-line 66-cent per share earnings tally in the second quarter, combined with a likely, weaker U.S. economic recovery, which probably won't register GDP growth above 2.5% in the third and fourth quarters.
JWN opened this morning at $31.79. So far today the stock has hit a low of $31.38 and a high of $32.92. As of 12:30, JWN is trading at $32.29 up $1.97 (6.5%). The chart for JWN looks neutral and S&P gives JWN a neutral 3 STARS (out of 5) hold ranking.
Below are some highlights from this past week's earnings coverage on BloggingStocks. Click through to the original posts for more details.
- Abercrombie & Fitch Co. (ANF) shares sold off after it posted a narrower Q1 net loss, but same-store sales rose.
- Applied Materials Inc. (AMAT) swung from a year-ago loss to a Q2 profit that was better than expected.
- Deere & Co. (DE) reported better-than-expected Q2 earnings and improved sales, and raised its full-year outlook.
- Dell Inc. (DELL) posted better-than-expected Q1 earnings, but the gross margin was disappointing, and shares fell.
- GameStop Corp. (GME) higher Q1 earnings beat consensus estimates but same-store sales declined.
- Gap Inc. (GPS) said its higher Q1 earnings beat expectations while revenue fell in line with estimates.
Shares of Nordstrom fell about $1 after the announcement, and have declined about $3 more, in-sync with the Dow's recent plunge, to trade at about $38.
In the first quarter, revenue rose 16.7% to $1.99 billion, with same store sales rising 12.0%. Each total obviously benefited from easy comparisons to the difficult 2009 year.
Here are some highlights from this past week's earnings coverage on BloggingStocks:
- Blockbuster Inc. (BBI) Q1 net loss was in line with estimates and same-store sales declined, shares also fell.
- CA Inc. (CA) shares sold off on high volume following the Q4 earnings miss and disappointing guidance.
- Cigna Corp. (CI) reported better-than-expected Q1 earnings and higher revenue, and reaffirmed its full-year outlook.
- Cisco Systems Inc. (CSCO) beat Q3 earnings and revenue expectations in the "strongest quarter in our history."
- Dean Foods Co. (DF) lower Q1earnings beat analysts' estimates, but shares fell on heavy volume afterward.
- Denny's Corp. (DENN) bested consensus estimates and year-ago EPS by a penny, but said same-store sales fell.
Nordstrom, Inc. (JWN) is down in afternoon trading. A quote of $39.58 just went by my screen, which represents a decline of $1.71, or over 4%. Volume is high. The market as a whole is pretty bad, so some of the stock's bleeding has to be related to the negative sentiment hitting the major indexes, but the retailer, whose colleagues include The Gap, Inc. (GPS) and J.C. Penney Company, Inc. (JCP), did issue a first-quarter earnings report yesterday after the bell, so we'll have to check that out to see if anything fundamental might be up.
I'll tell you, I thought the press release contained some impressive numbers. Earnings per share increased 40% to 52 cents. Same-store sales rocked with a double-digit jump of 12%. How can the traders be down on that data?
Already we've seen some red hot runs in the retail sector in anticipation of the consumer's return. Several consumer-related exchange-traded funds (ETFs) have been tearing things up on Wall Street lately -- lapping the broader market at least four times over!
There are lots of great individual retail stocks out there -- and no shortage of reasons to buy Walmart (WMT). But the fact is that blue chip retailers can often lag the broader sector, and small-cap retailers can sometimes be too volatile for many investors.