Nordstrom Inc. (JWN) is set to report FQ4 2014 earnings after the market closes on Thursday, February 20th. Nordstrom is an upscale fashion retailer often found in shopping malls. Despite weaker-than-usual retail sales across the board this holiday season, Wall Street is still expecting Nordstrom to report similar profit numbers to FQ4 last year as well a modest 3% increase in sales. Since 2011 JWN stock has been quite volatile but has continued to push higher with solid momentum. In 2013 Nordstrom shares were up 18%. Here's what investors expect Nordstrom to report this quarter.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for JWN to report $1.33 EPS and $3.705 revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is $1.34 EPS and $3.735B revenue. This quarter the buy-side, as represented by the Estimize.com community, is expecting Nordstrom to beat the Wall Street consensus on both EPS and revenue.
Over the previous 6 quarters the Estimize consensus has been more accurate than Wall Street in forecasting Nordstrom's EPS and revenue 2 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non-professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential on EPS, but a larger differential on revenue.
The distribution of estimates published by analysts on the Estimize.com platform range from $1.32 to $1.36 EPS and $3.680B to $3.843B in revenues. This quarter we're seeing a larger distribution of estimates for Nordstrom.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean more volatility post earnings.
The analyst with the highest estimate confidence rating this quarter is triker, who projects $1.36 EPS and $3.710B in revenue. In the Winter 2014 season triker is rated as the 75th best analyst and is ranked 137th overall among over 3,900 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case, triker is expecting Nordstrom to beat the Estimize consensus on EPS but come up short on revenue.
Despite weaker than usual sales through the holiday season, analysts and investors are optimistic about Nordstrom. This quarter contributing analysts on the Estimize.com platform expect Nordstrom to beat the Wall Street consensus on both the top and bottom line.
Disclosure: No positions