Nordstrom Inc’s (NYSE:JWN) most recent earnings update in October 2017 confirmed that the company endured a substantial headwind with earnings deteriorating by -41.00%. Below, I’ve laid out key numbers on how market analysts predict Nordstrom’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Nordstrom
Market analysts’ consensus outlook for this coming year seems rather subdued, with earnings rising by a single digit 0.53%. However, the following year seems to show a contrast, with earnings decreasing by -2.13%. This volatility continues into the final year of forecast, with earnings generating $487.6M.
Even though it’s informative knowing the growth each year relative to today’s figure, it may be more beneficial to evaluate the rate at which the company is moving every year, on average. The pro of this method is that we can get a better picture of the direction of Nordstrom’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -0.68%. This means that, we can anticipate Nordstrom will chip away at a rate of -0.68% every year for the next couple of years.
Next Steps:
For Nordstrom, I’ve compiled three pertinent factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is JWN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether JWN is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of JWN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.