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Jefferies boosts Nordstrom stock due to ‘structural advantage’

Yahoo Finance Live anchors discuss Jefferies upgrading Nordstrom from Hold to Buy.

Video Transcript

BRAD SMITH: We're also taking a look at shares that I like to refer to as John's, or at least, the Philly person in me refers to as John's. It's as close as we get. JWN, Nordstrom. All right, it's up 3% here on the day, after Jefferies upgraded the retailer to buy from hold, citing a structural advantage from higher income consumers. And this is all amid economic uncertainty. But particularly what we have seen among some of the higher income consumers, that they're continuing to buy, continuing to spend, at least in the higher end of retail.

For Nordstrom, they'd also been monitoring some of the discount or promotional size of their retail experience among Nordstrom Rack in the most recent quarter, too, and particularly where they're seeing that balance out between some of the consumers that are going to lean more into looking into the sales.

I was in the Nordstrom Rack just yesterday. If you're looking to buy a suit out there, there are plenty of suits at Nordstrom Rack. There is a lot of discounts. And I think for how they're going to compete going forward here and what this note had laid out, as my computer locks on me--

BRIAN SOZZI: Okta?

BRAD SMITH: Right, yeah, exactly. Now I got to type in their 20 characters again.

JULIE HYMAN: Oh, see, there you go.

BRAD SMITH: But for Nordstrom here, they are benefiting from that higher income consumer. And they've been talking about that in the most recent quarter, too.

BRIAN SOZZI: Well, they do note, and very key to all these calls, but specifically this one, they do acknowledge that they might be early in this call on Nordstrom. Nordstrom reported a couple of weeks ago. The market did not like the quarter. They saw some challenge there, notably in that Rack division. So look, it's not a strongly strong fundamental retailer, at least at this point, ahead of the holiday season. But still, I guess I know where they're coming from.

BRAD SMITH: Rack recovery is-- as I unlock my computer again, to your point.

BRIAN SOZZI: That was fast on Okta.

JULIE HYMAN: Brad's buying the suits. He's got the Rack recovery going on.