Markets & Finance

CSFB Cuts Nordstrom to 'Neutral'


CS First Boston downgraded Nordstrom (JWN) to neutral from outperform.

Analyst Michael Exstein says although the company remains one of the only mall anchors with a strong franchise value and unique strategy, first-quarter EPS was guided lower. He notes first-quarter EPS was guided to 12 cents to 15 cents, due to above plan markdowns and lack of SG&A leverage.

Exstein says it's clear the company has the potential to improve margins. However, in the near term, inexperience with new systems and/or difficult consumer cyclical environment keeps making real progress on gross margins more of a promise than a reality. He believes this will continue to pressure the company's relative multiple.


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