Exploring Strategic Opportunities: Nordstrom Inc. (JWN), Southwestern Energy Company (SWN)

Nordstrom Inc. (NYSE: JWN) shares are -61.69% down in the year-to-date (YTD) period and have moved 6.02% or $0.89 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +27.79% lower. Comparatively, the stock is -63.85% down YTD and -5.49% over the trailing 3-month period. If we look at the shorter duration, its week performance is 8.29% and 12.32% over the month.

Analyst Recommendations

On July 08, 2020, Telsey Advisory Group recommended the JWN stock is a Market Perform, while earlier, Telsey Advisory Group had Reiterated the stock as a Market Perform on August 26, 2020. 22 analysts offering the recommendations for the stock have a consensus rating of 3.10 to suggest that the JWN stock is a “Hold. 3 of the 22 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $15.68 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $18.39. The forecasts give the Nordstrom Inc. stock a price target range of $30.00 on the higher side while at least one analyst think the stock could plunge to a low of $11.00. The two limits represent an upside potential of 47.73% or -42.55%.

Earnings Forecast

Analysts estimate the earnings to decrease -9.50% in the current quarter to -$0.01, down from the $0.81 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$4.11, down -26.00% from $3.37 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.05 and $1.13. Wall Street estimates earnings per share to be at an average of $1.58 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 30 over the last 12 months, while SEC filings reveal that there have been 28 insider sales over the same period. Insiders have purchases 551,506 shares while those sold by company executives and officers stand at 309,436. The last 3 months have seen insiders trade a total of 84,384 and 397 in purchases and sales respectively.

NORDSTROM PETER E, a Pres. & Chief Brand Officer at the company, sold 18,030 shares worth $0.44 million at $24.42 per share on Mar 11. The Chief Executive Officer had earlier sold another 16,486 JWN shares valued at $0.4 million on Mar 11. The shares were sold at $24.42 per share. BRAMMAN ANNE L (Chief Financial Officer) sold 3,333 shares at $42.25 per share on Jan 08 for a total of $0.14 million while NORDSTROM ERIK B, (Co-President) sold 77,609 shares on Jan 07 for $3.33 million with each share fetching $42.92.

Southwestern Energy Company (NYSE:SWN), on the other hand, is trading around $2.86 with a market cap of $1.75B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $3.38 and spell out a more modest performance – a 15.38% return. Some analysts are even forecasting $0.22 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Southwestern Energy Company (SWN) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

SWN’s operating margin was negative on the trailing 12 months basis, remaining steady at -91.00%, while the operating expenses over the recent quarter were at $22.0 million. This represented a 94.63% of the company’s total revenues which amounted $410.0 million. With this in place, we can see that the company’s diluted EPS declined -$1.63 on the year-over-year period, growing to $0.26 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $4.55 billion from $5.28 billion over the previous quarter. The cash flow from operating activities totaled $254.0 million, significantly lower than the $543.0 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$218.0 million.

Insider activity

Insiders have transacted a total of 12 times at Southwestern Energy Company over the last 6 months, with insider purchases undertaken 9 times and accounting for 929,151 shares. Insider sales totaled 222,163 shares over the same period, with these deals completed in 3 transactions. Looking at these numbers, we realize that net purchases over that period are 6.0 shares. Insiders now hold a total of 3.27M shares after the latest sales, with 39.80% net shares purchased.

Major holders

Insiders own 0.30% of the company shares, while shares held by institutions stand at 91.60% with a share float percentage of 537.94M. Investors are also buoyed by the number of investors in a company, with Southwestern Energy Company having a total of 370 institutions that hold shares in the company. The top two institutional holders are Blackrock Inc. with over 84.06 million shares worth more than $215.2 million. As of Jun 29, 2020, Blackrock Inc. held 13.88% of shares outstanding.

The other major institutional holder is FMR, LLC, with the investment firm holding over 81.25 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $208.0 million and represent 13.42% of shares outstanding.