Stifel Sees Few New Store Opportunities for Nordstrom, Downgrades to Hold

In a report published Thursday, Stifel analyst Richard Jaffe downgraded

from Buy to Hold and removed the $65.00 price target. On Thursday, Nordstrom reported fourth quarter and fiscal year 2013 earnings. The company reported fourth quarter EPS of $1.37, a 3% decrease from last year. Management noted that results were heavily impacted by the absence of a 53rd week which contributed to $0.04 last year. Excluding the 53rd week, sales increased 5.2% year-over-year. Nordstrom forecasts first quarter and 2014 EPS guidance to be within $0.60-$0.70 and $3.75-$3.90, respectively. Jaffe remarked on Nordstrom's EPS guidance and operating margin decline year-over-year. The analyst wrote, "While JWN is a best-in-class retailer, we believe the stock is expensive at this level given the operating margin pressure related to the costly Canadian and e-commerce investments and the accelerated Rack expansion." Stifel also commented on the U.S. Retail Market. The analyst noted that although the U.S. Retail Market is lucrative, there are few new store opportunities as "market is nearly saturated with JWN full-line stores". Shares of Nordstrom closed at $59.44 on Thursday and is currently down 1.04% at $58.82.