Market Overview

KeyBanc Downgrades Nordstrom, Urban Outfitters, Says E-Commerce Pressures Are Only Increasing

KeyBanc Downgrades Nordstrom, Urban Outfitters, Says E-Commerce Pressures Are Only Increasing

The growth of online retailers and subscription boxes means success for traditional retail stores like Nordstrom (NYSE: JWN) and Urban Outfitters (NYSE: URBN) will be harder fought, according to KeyBanc Capital Markets. 

The Analyst

Analyst Edward Yruma downgraded both Nordstrom and Urban Outfitters from Overweight to Sector Weight.

The Thesis

“Despite sizable e-comm investments, a continued push by, Inc. (NASDAQ: AMZN) into apparel and the data-focused approach of Stitch Fix Inc (NASDAQ: SFIX) necessitate continued investments,” Yruma said in a Monday note. (See the analyst's track record here.) 

Online sales and subscriptions make shopping much less stressful and laborious for consumers, and online retail can be specifically marketed for those with busy schedules, Yruma said. In addition to convenience, certain brands offer a personalized look for the consumer, acting essentially as a personal stylist.

Traditional retail stores are in some ways unable to compete with e-commerce, despite the stability of retail leaders such as Nordstrom and Urban Outfitters, the analyst said.

“Performance at URBN accelerated demonstrably ... and the company should continue to benefit from a favorable fashion cycle," Yruma said. "Comp comparisons will get increasingly difficult in the second half and earnings growth will need to be driven by gross margin expansion." 

Price Action

Nordstrom shares were trading down 2.65 percent at $52 late in Tuesday's session, while Urban Outfitters was trading down 0.24 percent at $45.69. 

Related Links:

Forrester Research Analyst: Yes, There Is Still Growth In Physical Retail

Analyst: Investors Should Continue Buying Urban Outfitters After 'Impressive' Q1

Public domain photo via Wikimedia. 

Latest Ratings for JWN

Nov 2019Initiates Coverage OnEqual-Weight
Oct 2019DowngradesNeutralSell
Oct 2019MaintainsNeutral

View More Analyst Ratings for JWN
View the Latest Analyst Ratings

Posted-In: Edward Yruma KeyBanc Capital MarketsAnalyst Color Downgrades Analyst Ratings Best of Benzinga


Related Articles (AMZN + JWN)

View Comments and Join the Discussion!

Latest Ratings

MJP MorganMaintains13.0
IPARDA DavidsonMaintains76.0
TGTMorgan StanleyMaintains130.0
VCMorgan StanleyMaintains52.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Spotify Could See Trouble In Label Renegotiations, Engagement Efforts

Mid-Afternoon Market Update: OncoCyte Surges Following Positive DetermaVu Study Results; IsoRay Shares Drop