Recent change to management incentive comp, cost cuts, trough multiple on low expectations, upcoming analyst day, insider ownership, and improving trends make for an interesting risk/reward set-up
“In 2Q20, cash interest expense was $34m, cash taxes of $8m , and capex of $97m. Using these as a run rate gets to annual cash interest of $136m, taxes of $32m, and capex of $400m. Subtracting this from the $1,080 EBITDA estimate gets to ~$500m of FCF or a ~20% FCFE yield.”
I’m still learning so apologies for the elementary questions, but why aren’t you including rent expenses in the calculation above?
Your analysis mirrors mine almost exactly, and it's lonely out here!
I would only emphasize what you have already noted - that reduction of in-line mall locations of competitors/vendors is an often overlooked incremental benefit to Nordstrom, as well as the fact that, even though Nordstrom is located predominantly in A malls, it is not necessary to enter the mall to shop at Nordstrom, and having visited myself several times recently, visiting Nordstrom, even during these challenging times, is a very comfortable experience.....
“In 2Q20, cash interest expense was $34m, cash taxes of $8m , and capex of $97m. Using these as a run rate gets to annual cash interest of $136m, taxes of $32m, and capex of $400m. Subtracting this from the $1,080 EBITDA estimate gets to ~$500m of FCF or a ~20% FCFE yield.”
I’m still learning so apologies for the elementary questions, but why aren’t you including rent expenses in the calculation above?
Your analysis mirrors mine almost exactly, and it's lonely out here!
I would only emphasize what you have already noted - that reduction of in-line mall locations of competitors/vendors is an often overlooked incremental benefit to Nordstrom, as well as the fact that, even though Nordstrom is located predominantly in A malls, it is not necessary to enter the mall to shop at Nordstrom, and having visited myself several times recently, visiting Nordstrom, even during these challenging times, is a very comfortable experience.....