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Is Nordstrom (JWN) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Nordstrom (JWN - Free Report) is a stock many investors are watching right now. JWN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.20 right now. For comparison, its industry sports an average P/E of 20.20. Over the last 12 months, JWN's Forward P/E has been as high as 13.36 and as low as 8.43, with a median of 11.78.

Another valuation metric that we should highlight is JWN's P/B ratio of 4.05. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 7.03. Within the past 52 weeks, JWN's P/B has been as high as 4.65 and as low as 3.24, with a median of 3.90.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. JWN has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.49.

These are only a few of the key metrics included in Nordstrom's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, JWN looks like an impressive value stock at the moment.


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