As of May 25, 2025, Nordstrom Inc has a Discounted Cash Flow (DCF) derived fair value of $33.38 per share. With the current market price at $24.66, this represents a potential upside of 35.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $29.47 |
| DCF Fair Value (10-year) | $33.38 |
| Potential Upside (5-year) | 19.5% |
| Potential Upside (10-year) | 35.3% |
| Discount Rate (WACC) | 5.5% - 7.1% |
Revenue is projected to grow from $15016 million in 02-2025 to $21896 million by 02-2035, representing a compound annual growth rate of approximately 3.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 02-2025 | 15016 | 2% |
| 02-2026 | 15782 | 5% |
| 02-2027 | 16380 | 4% |
| 02-2028 | 16708 | 2% |
| 02-2029 | 17194 | 3% |
| 02-2030 | 17799 | 4% |
| 02-2031 | 18561 | 4% |
| 02-2032 | 19880 | 7% |
| 02-2033 | 20670 | 4% |
| 02-2034 | 21467 | 4% |
| 02-2035 | 21896 | 2% |
Net profit margin is expected to improve from 2% in 02-2025 to 2% by 02-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 02-2025 | 294 | 2% |
| 02-2026 | 300 | 2% |
| 02-2027 | 312 | 2% |
| 02-2028 | 318 | 2% |
| 02-2029 | 327 | 2% |
| 02-2030 | 339 | 2% |
| 02-2031 | 353 | 2% |
| 02-2032 | 378 | 2% |
| 02-2033 | 393 | 2% |
| 02-2034 | 408 | 2% |
| 02-2035 | 417 | 2% |
with a 5-year average of $490 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 02-2026 | 522 |
| 02-2027 | 535 |
| 02-2028 | 557 |
| 02-2029 | 562 |
| 02-2030 | 583 |
| 02-2031 | 602 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 7 |
| Days Inventory | 76 |
| Days Payables | 48 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | 1043 | 113 | 548 | (18) | 400 |
| 2027 | 1075 | 117 | 569 | 67 | 322 |
| 2028 | 1107 | 119 | 580 | 29 | 379 |
| 2029 | 1129 | 123 | 597 | 19 | 390 |
| 2030 | 1169 | 127 | 618 | 48 | 376 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 29.47 | 19.5% |
| 10-Year DCF (Growth) | 33.38 | 35.3% |
| 5-Year DCF (EBITDA) | 26.24 | 6.4% |
| 10-Year DCF (EBITDA) | 31.54 | 27.9% |
Is Nordstrom Inc (JWN) a buy or a sell? Nordstrom Inc is definitely a buy. Based on our DCF analysis, Nordstrom Inc (JWN) appears to be significantly undervalued with upside potential of 35.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $24.66.