Intrinsic value of Nordstrom - JWN

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$47.62

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$47.62

 
Intrinsic value

$65.82

 
Up/down potential

+38%

 
Rating

buy

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of JWN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.22
  2.90
  3.11
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
Revenue, $m
  14,757
  15,185
  15,657
  16,174
  16,735
  17,341
  17,993
  18,692
  19,439
  20,235
  21,082
  21,982
  22,936
  23,947
  25,016
  26,147
  27,341
  28,602
  29,932
  31,334
  32,812
  34,369
  36,008
  37,734
  39,551
  41,462
  43,472
  45,587
  47,811
  50,149
  52,607
Variable operating expenses, $m
 
  14,030
  14,466
  14,942
  15,460
  16,019
  16,620
  17,265
  17,954
  18,688
  19,470
  20,276
  21,156
  22,088
  23,075
  24,118
  25,219
  26,382
  27,609
  28,902
  30,265
  31,701
  33,213
  34,805
  36,481
  38,244
  40,098
  42,049
  44,100
  46,257
  48,524
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  13,952
  14,030
  14,466
  14,942
  15,460
  16,019
  16,620
  17,265
  17,954
  18,688
  19,470
  20,276
  21,156
  22,088
  23,075
  24,118
  25,219
  26,382
  27,609
  28,902
  30,265
  31,701
  33,213
  34,805
  36,481
  38,244
  40,098
  42,049
  44,100
  46,257
  48,524
Operating income, $m
  805
  1,155
  1,191
  1,231
  1,275
  1,322
  1,373
  1,427
  1,485
  1,547
  1,612
  1,706
  1,780
  1,859
  1,942
  2,029
  2,122
  2,220
  2,323
  2,432
  2,547
  2,667
  2,795
  2,929
  3,070
  3,218
  3,374
  3,538
  3,711
  3,892
  4,083
EBITDA, $m
  1,450
  1,793
  1,849
  1,910
  1,976
  2,048
  2,125
  2,207
  2,295
  2,389
  2,489
  2,596
  2,708
  2,828
  2,954
  3,087
  3,228
  3,377
  3,534
  3,700
  3,874
  4,058
  4,252
  4,456
  4,670
  4,896
  5,133
  5,383
  5,646
  5,922
  6,212
Interest expense (income), $m
  134
  133
  102
  112
  122
  133
  146
  159
  173
  188
  204
  221
  239
  258
  278
  299
  322
  346
  371
  398
  426
  456
  487
  520
  555
  591
  629
  670
  712
  757
  803
Earnings before tax, $m
  684
  1,022
  1,089
  1,120
  1,153
  1,189
  1,227
  1,268
  1,312
  1,359
  1,409
  1,486
  1,542
  1,601
  1,664
  1,730
  1,800
  1,874
  1,952
  2,034
  2,120
  2,212
  2,308
  2,409
  2,515
  2,627
  2,745
  2,869
  2,999
  3,136
  3,279
Tax expense, $m
  330
  276
  294
  302
  311
  321
  331
  342
  354
  367
  380
  401
  416
  432
  449
  467
  486
  506
  527
  549
  573
  597
  623
  650
  679
  709
  741
  775
  810
  847
  885
Net income, $m
  354
  746
  795
  817
  842
  868
  896
  926
  958
  992
  1,028
  1,084
  1,125
  1,169
  1,214
  1,263
  1,314
  1,368
  1,425
  1,485
  1,548
  1,615
  1,685
  1,758
  1,836
  1,918
  2,004
  2,094
  2,189
  2,289
  2,394

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,007
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,858
  7,050
  7,269
  7,509
  7,769
  8,051
  8,353
  8,678
  9,024
  9,394
  9,787
  10,205
  10,648
  11,117
  11,614
  12,139
  12,693
  13,278
  13,896
  14,547
  15,233
  15,956
  16,717
  17,518
  18,361
  19,249
  20,182
  21,164
  22,196
  23,282
  24,423
Adjusted assets (=assets-cash), $m
  6,851
  7,050
  7,269
  7,509
  7,769
  8,051
  8,353
  8,678
  9,024
  9,394
  9,787
  10,205
  10,648
  11,117
  11,614
  12,139
  12,693
  13,278
  13,896
  14,547
  15,233
  15,956
  16,717
  17,518
  18,361
  19,249
  20,182
  21,164
  22,196
  23,282
  24,423
Revenue / Adjusted assets
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
  2.154
Average production assets, $m
  3,816
  3,933
  4,055
  4,189
  4,334
  4,491
  4,660
  4,841
  5,035
  5,241
  5,460
  5,693
  5,940
  6,202
  6,479
  6,772
  7,081
  7,408
  7,752
  8,116
  8,498
  8,901
  9,326
  9,773
  10,244
  10,739
  11,259
  11,807
  12,383
  12,989
  13,625
Working capital, $m
  213
  -805
  -830
  -857
  -887
  -919
  -954
  -991
  -1,030
  -1,072
  -1,117
  -1,165
  -1,216
  -1,269
  -1,326
  -1,386
  -1,449
  -1,516
  -1,586
  -1,661
  -1,739
  -1,822
  -1,908
  -2,000
  -2,096
  -2,197
  -2,304
  -2,416
  -2,534
  -2,658
  -2,788
Total debt, $m
  2,774
  2,131
  2,328
  2,544
  2,778
  3,032
  3,304
  3,596
  3,908
  4,241
  4,595
  4,971
  5,369
  5,792
  6,238
  6,711
  7,210
  7,737
  8,292
  8,878
  9,496
  10,146
  10,831
  11,552
  12,311
  13,110
  13,950
  14,833
  15,763
  16,739
  17,766
Total liabilities, $m
  6,988
  6,345
  6,542
  6,758
  6,992
  7,246
  7,518
  7,810
  8,122
  8,455
  8,809
  9,185
  9,583
  10,006
  10,452
  10,925
  11,424
  11,951
  12,506
  13,092
  13,710
  14,360
  15,045
  15,766
  16,525
  17,324
  18,164
  19,047
  19,977
  20,953
  21,980
Total equity, $m
  870
  705
  727
  751
  777
  805
  835
  868
  902
  939
  979
  1,021
  1,065
  1,112
  1,161
  1,214
  1,269
  1,328
  1,390
  1,455
  1,523
  1,596
  1,672
  1,752
  1,836
  1,925
  2,018
  2,116
  2,220
  2,328
  2,442
Total liabilities and equity, $m
  7,858
  7,050
  7,269
  7,509
  7,769
  8,051
  8,353
  8,678
  9,024
  9,394
  9,788
  10,206
  10,648
  11,118
  11,613
  12,139
  12,693
  13,279
  13,896
  14,547
  15,233
  15,956
  16,717
  17,518
  18,361
  19,249
  20,182
  21,163
  22,197
  23,281
  24,422
Debt-to-equity ratio
  3.189
  3.020
  3.200
  3.390
  3.580
  3.770
  3.960
  4.140
  4.330
  4.510
  4.690
  4.870
  5.040
  5.210
  5.370
  5.530
  5.680
  5.830
  5.970
  6.100
  6.230
  6.360
  6.480
  6.590
  6.700
  6.810
  6.910
  7.010
  7.100
  7.190
  7.270
Adjusted equity ratio
  -0.020
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  354
  746
  795
  817
  842
  868
  896
  926
  958
  992
  1,028
  1,084
  1,125
  1,169
  1,214
  1,263
  1,314
  1,368
  1,425
  1,485
  1,548
  1,615
  1,685
  1,758
  1,836
  1,918
  2,004
  2,094
  2,189
  2,289
  2,394
Depreciation, amort., depletion, $m
  645
  638
  657
  678
  701
  726
  752
  780
  810
  843
  877
  890
  928
  969
  1,012
  1,058
  1,106
  1,157
  1,211
  1,268
  1,328
  1,391
  1,457
  1,527
  1,601
  1,678
  1,759
  1,845
  1,935
  2,029
  2,129
Funds from operations, $m
  2,105
  1,384
  1,452
  1,496
  1,543
  1,593
  1,648
  1,706
  1,768
  1,835
  1,905
  1,974
  2,054
  2,138
  2,227
  2,321
  2,420
  2,525
  2,636
  2,753
  2,876
  3,005
  3,142
  3,285
  3,437
  3,596
  3,763
  3,939
  4,124
  4,318
  4,523
Change in working capital, $m
  457
  -23
  -25
  -27
  -30
  -32
  -35
  -37
  -40
  -42
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -83
  -87
  -91
  -96
  -101
  -107
  -112
  -118
  -124
  -130
Cash from operations, $m
  1,648
  1,488
  1,478
  1,523
  1,572
  1,625
  1,682
  1,743
  1,808
  1,877
  1,950
  2,022
  2,104
  2,191
  2,283
  2,381
  2,484
  2,592
  2,707
  2,827
  2,954
  3,088
  3,229
  3,377
  3,533
  3,697
  3,869
  4,051
  4,242
  4,442
  4,653
Maintenance CAPEX, $m
  0
  -596
  -615
  -634
  -655
  -677
  -702
  -728
  -756
  -787
  -819
  -853
  -890
  -928
  -969
  -1,012
  -1,058
  -1,106
  -1,157
  -1,211
  -1,268
  -1,328
  -1,391
  -1,457
  -1,527
  -1,601
  -1,678
  -1,759
  -1,845
  -1,935
  -2,029
New CAPEX, $m
  -846
  -117
  -122
  -134
  -145
  -157
  -169
  -181
  -193
  -206
  -219
  -233
  -247
  -262
  -277
  -293
  -309
  -327
  -344
  -363
  -383
  -403
  -425
  -447
  -470
  -495
  -521
  -548
  -576
  -606
  -637
Cash from investing activities, $m
  -791
  -713
  -737
  -768
  -800
  -834
  -871
  -909
  -949
  -993
  -1,038
  -1,086
  -1,137
  -1,190
  -1,246
  -1,305
  -1,367
  -1,433
  -1,501
  -1,574
  -1,651
  -1,731
  -1,816
  -1,904
  -1,997
  -2,096
  -2,199
  -2,307
  -2,421
  -2,541
  -2,666
Free cash flow, $m
  857
  775
  741
  756
  773
  791
  812
  834
  858
  884
  912
  935
  967
  1,001
  1,037
  1,076
  1,116
  1,159
  1,205
  1,253
  1,303
  1,357
  1,413
  1,473
  1,535
  1,601
  1,671
  1,744
  1,821
  1,902
  1,987
Issuance/(repayment) of debt, $m
  -6
  -632
  197
  216
  234
  253
  272
  292
  312
  333
  354
  376
  399
  422
  447
  472
  499
  527
  556
  586
  617
  650
  685
  721
  759
  799
  840
  884
  929
  977
  1,027
Issuance/(repurchase) of shares, $m
  -194
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -189
  -632
  197
  216
  234
  253
  272
  292
  312
  333
  354
  376
  399
  422
  447
  472
  499
  527
  556
  586
  617
  650
  685
  721
  759
  799
  840
  884
  929
  977
  1,027
Total cash flow (excl. dividends), $m
  668
  143
  938
  972
  1,007
  1,045
  1,084
  1,126
  1,170
  1,217
  1,266
  1,311
  1,366
  1,424
  1,484
  1,548
  1,615
  1,686
  1,760
  1,839
  1,921
  2,007
  2,098
  2,194
  2,294
  2,400
  2,511
  2,628
  2,750
  2,879
  3,014
Retained Cash Flow (-), $m
  1
  -831
  -22
  -24
  -26
  -28
  -30
  -32
  -35
  -37
  -39
  -42
  -44
  -47
  -50
  -52
  -55
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -89
  -93
  -98
  -103
  -109
  -114
Prev. year cash balance distribution, $m
 
  996
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  308
  916
  948
  981
  1,016
  1,054
  1,094
  1,136
  1,180
  1,227
  1,270
  1,322
  1,377
  1,435
  1,496
  1,560
  1,627
  1,699
  1,773
  1,852
  1,935
  2,022
  2,114
  2,210
  2,311
  2,418
  2,529
  2,647
  2,770
  2,900
Discount rate, %
 
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
 
  293
  829
  809
  787
  761
  732
  701
  666
  629
  590
  546
  503
  460
  416
  373
  330
  289
  250
  213
  179
  149
  121
  97
  76
  59
  45
  33
  24
  17
  12
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for men, women, and children in the United States and Canada. It operates through two segments, Retail and Credit. The Retail segment offers a selection of brand name and private label merchandise through various channels, including Nordstrom branded full-line stores and online store at Nordstrom.com; Nordstrom Rack stores; Nordstromrack.com and HauteLook; and other retail channels, including Trunk Club showrooms and TrunkClub.com, Jeffrey boutiques, and clearance store that operates under the name Last Chance. The Credit segment operates Nordstrom fsb, a federal savings bank, which provides a private label credit card, two Nordstrom VISA credit cards, and a debit card. Its credit and debit cards feature a shopping-based loyalty program. As of February 15, 2017, the company operated 349 stores in 40 states, including 123 full-line stores in the United States, Canada, and Puerto Rico; 215 Nordstrom Rack stores; 2 Jeffrey boutiques; and 2 clearance stores. Nordstrom, Inc. also sells its products through catalogs. The company was founded in 1901 and is based in Seattle, Washington.

FINANCIAL RATIOS  of  Nordstrom (JWN)

Valuation Ratios
P/E Ratio 22.9
Price to Sales 0.5
Price to Book 9.3
Price to Tangible Book
Price to Cash Flow 4.9
Price to Free Cash Flow 10.1
Growth Rates
Sales Growth Rate 2.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.8%
Cap. Spend. - 3 Yr. Gr. Rate 1%
Financial Strength
Quick Ratio 92
Current Ratio 0
LT Debt to Equity 317.6%
Total Debt to Equity 318.9%
Interest Coverage 6
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 7.5%
Return On Total Capital 9.7%
Ret/ On T. Cap. - 3 Yr. Avg. 12%
Return On Equity 40.7%
Return On Equity - 3 Yr. Avg. 36.3%
Asset Turnover 1.9
Profitability Ratios
Gross Margin 36%
Gross Margin - 3 Yr. Avg. 36.8%
EBITDA Margin 9.9%
EBITDA Margin - 3 Yr. Avg. 11.8%
Operating Margin 5.5%
Oper. Margin - 3 Yr. Avg. 7.6%
Pre-Tax Margin 4.6%
Pre-Tax Margin - 3 Yr. Avg. 6.7%
Net Profit Margin 2.4%
Net Profit Margin - 3 Yr. Avg. 4%
Effective Tax Rate 48.2%
Eff/ Tax Rate - 3 Yr. Avg. 42%
Payout Ratio 72.3%

JWN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JWN stock intrinsic value calculation we used $14757 million for the last fiscal year's total revenue generated by Nordstrom. The default revenue input number comes from 2017 income statement of Nordstrom. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our JWN stock valuation model: a) initial revenue growth rate of 2.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.9%, whose default value for JWN is calculated based on our internal credit rating of Nordstrom, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nordstrom.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of JWN stock the variable cost ratio is equal to 92.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for JWN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.8% for Nordstrom.

Corporate tax rate of 27% is the nominal tax rate for Nordstrom. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the JWN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for JWN are equal to 25.9%.

Life of production assets of 6.4 years is the average useful life of capital assets used in Nordstrom operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for JWN is equal to -5.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $870 million for Nordstrom - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 167.275 million for Nordstrom is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nordstrom at the current share price and the inputted number of shares is $8.0 billion.


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▶ Can Nordstrom Inc. Buck the Downward Trend in Retail?   [Mar-07-17 02:40PM  at Motley Fool]
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Stock chart of JWN Financial statements of JWN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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