Analyst Note
| David Swartz |Although Nordstrom’s 2022 third-quarter results came in slightly above our modest expectations and the company reaffirmed full-year guidance, its shares dropped 9% in Nov. 22 postmarket trading. We attribute the reaction to the sluggishness of its recovery from the pandemic, as well as its relative underperformance as compared with some peers. Even so, Nordstrom’s retail sales decline of 3% bettered our negative 5% forecast, and we believe the positive effects of its product and supply chain efficiency efforts will become more apparent over the next couple of years. We do not expect to make any material change to our $42 fair value estimate and view Nordstrom’s shares as very attractive. Despite a slow recovery, we do not think the company’s brand intangible asset, the source of our narrow moat rating, has been impaired.