Sterne Agee Reiterates Buy Rating on Nordstrom (JWN)

Sterne Agee is out with a research report this morning, where it reiterates its Buy rating on Nordstrom Inc.

; it also has a $50.00 price target on the stock. The Sterne Agee analysts said, “JWN printed June same-store-sales (

) of 14.1%, above Retail Metrics consensus of 9.1% and our 10-12% estimate. The comp was driven by a 12.7% increase at the Full-Line stores, a 60 bps increase at the Rack and 66% growth in ecommerce. Total sales increased 19.8% y/y. Transactions increased for the 10th consecutive month, while ASPs declined. The shift of Memorial Day and the Half-Yearly sale contributed ~350-400 bps to the headline print. SSS performance for the Half-Yearly sale was in the HSD, implying strength during the non-sale days.” They added, “Category strength enjoyed in dresses, jewelry and women’s shoes. All three of these are repeat mentions from preceding months. Geographically, the company noted strength in the MW, MidAtlantic and the Northwest. California remains below the company average.” The Sterne Agee analysts closed by saying, “June was one of the remaining easy compares for JWN, but we believe the strong sales trends are more than just an optical recovery. The upcoming Anniversary Sale will be an important barometer of sale momentum, broader consumer sentiment and the health of the high-end consumer given the dearth of major events in retail until “Back to School.” We have a positive impression of the product offerings for the Anniversary Sale and believe inventory will be better positioned to capture sales than in ’09 considering the recent inventory unification implemented last year and recent sales momentum. Valuation (‘11E: 6.4x EBITDA, 12.4x EPS) is at historically attractive levels. We are raising ’10 and ’11 from $2.71 and $3.22 to $2.72 and $3.24.” Learn how to find the best

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