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Nordstrom, Inc. (JWN): A Bull Case Theory

We came across a bullish thesis on Nordstrom, Inc. (JWN) on ValueInvestorsClub by FT42. In this article we will summarize the bulls’ thesis on JWN. Nordstrom, Inc. shares were trading at $22.11 when this thesis was published, vs. closing price of $22.24 as of Sept 10.

A fashionable retail store showcasing the company’s apparel products.

Nordstrom, currently trading at a P/E multiple of 12, presents an intriguing investment opportunity due to several near-term catalysts. The company’s market value has nearly halved over the past five years, but three key developments could improve its valuation within the next 12 months.

First, Nordstrom’s valuation could naturally expand as the consumer spending environment improves. Since the Federal Reserve’s interest rate hikes, Nordstrom has struggled due to muted discretionary consumer spending. However, with inflation significantly reduced in 2024, a more favorable consumer environment is emerging. As spending rebounds, Nordstrom’s multiple could rise to its historical level of 15, representing a 25% upside from its current level.

Second, Nordstrom has made strategic internal changes that could drive organic growth. The recent launch of a digital marketplace on its ecommerce platform and a renewed focus on the brands that matter most to customers signal a more targeted approach to inventory management. This shift could yield positive long-term results, enhancing revenue growth and profitability.

Third, there is potential for a go-private deal, which could unlock significant value for shareholders. The Nordstrom family is actively exploring such an option, and any progress could serve as a short-term catalyst for the stock.

Despite challenges since COVID-19, Nordstrom’s recent financial performance shows signs of recovery. In FY2024 Q1, its revenue was $3.221 billion, down just 3.8% compared to FY2019 Q1, despite the closure of 13 stores in Canada. Adjusting for these closures, its revenue is nearing pre-pandemic levels. However, its gross margin stands at 31.6%, slightly below the 33.5% level in 2019, while its selling, general, and administrative (SG&A) expenses have risen to 35.8%, reflecting costs related to ecommerce growth and inventory management.

The consumer spending environment is poised to improve as inflation continues to cool, with the possibility of an interest rate cut further boosting discretionary spending. This would benefit Nordstrom, which relies heavily on consumer sentiment for its sales growth. Additionally, the launch of its digital marketplace and a refined inventory strategy focusing on key brands align with its efforts to drive future growth. The marketplace’s unowned inventory model reduces the risk of excess inventory and enhances Nordstrom’s value proposition to both brands and customers.

Nordstrom’s valuation could rise if these catalysts materialize. The company’s FY2024 EPS is projected to range from $1.65 to $2.05, but an improved consumer environment and internal strategic changes could push EPS to the higher end in FY2025. Applying a P/E multiple of 15 would imply a stock price of $30, offering a potential upside of 50%.

Nordstrom, Inc. is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held JWN at the end of the second quarter which was 28 in the previous quarter. While we acknowledge the potential of JWN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as JWN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and 10 Best of Breed Stocks to Buy For The Third Quarter of 2024 According to Bank of America.

Disclosure: None. This article was originally published at Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…