Maxim Group Starts Coverage of Nordstrom at "Buy," Sees 22% Upside (JWN)

Maxim Group Starts Coverage of Nordstrom at “Buy,” Sees 22% Upside (JWN)


Late on Monday, analysts at Maxim Group initiated coverage of Nordstrom, Inc. (JWN) with a bullish rating due to a number of positive catalysts.

The analysts rate JWN as “Buy” and see shares reaching $70. This price target suggests a 22% upside to Monday’s closing price of $57.45.

Maxim Group analyst Rick Snyder commented, “We arrive at our price target by applying a 7.5x EV/EBITDA multiple to our 2015 EBITDA estimate of $2,165.0 million. We adjust back by one year at a 5.0% discount rate. Nordstrom shares have recently traded between a range of 7.2x and 7.9x EV/EBITDA. Based on 1.) Nordstrom’s investment in omni-channel selling; 2.) the relatively high income level of Nordstrom’s customers; and 3.) its differentiated position within the department store sector, 4.) Expansion in the Nordstrom Rack division (which produce a higher ROIC than full line Nordstrom stores) should accelerate square footage growth to a mid single digit rate from low single digits previously, we believe that Nordstrom deserves a premium over the 7.0x multiple we use to value typical department stores.”

Nordstrom shares were up 55 cents, or 0.96%, during pre-market trading on Tuesday. The stock is up 7.38% year-to-date.

The Bottom Line
Shares of Nordstrom (JWM) have a dividend yield of 2.09% based on last night’s closing price of $57.45 and the company’s annualized dividend payout of $1.20 per share.

Nordstrom, Inc. (JWN) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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