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Stock Strategist

Going Private Possible for Nordstrom

Even after the price bump from the news, the stock trades for less than we think it’s worth.

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 Nordstrom’s (JWN) share price soared after the June 8 announcement that the Nordstrom family is exploring the option of taking its namesake company private. Combined, the family owns just over 30% of the department store.

We are not surprised by this news, as we have held that narrow-moat Nordstrom is better positioned than its no-moat peers, with a better-sized and -located store base (353 stores at the end of the first quarter versus Macy’s (M) 668), exposure to the growing off-price sector (about 30% of revenue is driven by Nordstrom Rack), curated offerings that differentiate it from e-commerce competitors, and reputation for customer experience excellence.

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Bridget Weishaar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.