Nordstrom’s stock surged Tuesday after a financial firm upgraded the department store.
Wedbush Securities upgraded the retailer’s stock from neutral to outperform and set a new price target of $75, up from its previous $55 a share.
Shares of Nordstrom, which have been at a yearlong high, shot up more than 7 percent during intraday trading, closing 6.9 percent higher at $66.90.
Jennifer Redding, senior equity analyst at Wedbush, said Nordstrom has been “hitting home runs” in the last two quarters with its strategic partnerships, omnichannel operation and online experience.
That means customers can find Allbirds sneakers and Reformation clothes only at Nordstrom. Or, shop online without the web site crashing. Or, purchase something in-store and have it delivered to their house, Redding said.
“It’s one of the best department stores online,” she said. “If you want a pair of Allbirds you’re not going to find them anywhere else but Nordstrom or Allbirds.com. These are very limited partnerships with unique brands that aren’t everywhere. And the web site is fast and speedy and has a nice aesthetic. It’s a seamless shopping experience.”
In addition, Nordstrom, much like Lululemon’s model, has successfully leveraged data to let consumers shop across platforms, which reduces leftover inventory.
“They have the ability to get the right inventory in the right place,” Redding said.
Last year, the Nordstrom family, who are the combined majority shareholders of the department store, owning about $2 billion in company stock, were in discussions with the Nordstrom board to take the company private. But talks were called off in March after both parties couldn’t agree on a price.
Shares slipped slightly in March after the deal was called off, but continued upward throughout the summer, including a favorable second quarter.
“It wasn’t a one quarter wonder,” Redding said.
In the note, the analyst wrote that the decreased headwinds are a “value for shareholders,” and expects the momentum to continue with positive in-store traffic ahead of the holiday shopping season and as the department store rolls out new merchandise.
Nordstrom reports third earnings on Nov. 15 after market close.