Analyst raises price target for Nordstrom by $3

An analyst raised his price target on shares of department store operator Nordstrom Inc. on Monday, expecting sales growth to boost the company's bottom line.

JPMorgan analyst Charles Grom raised his price target by $3 to $33. That implies shares have room to decline 2.7 percent from Friday's close of $33.93.

Earlier this month, Nordstrom said October sales in stores open at least one year rose 6.5 percent, which topped analyst expectations. Sales at stores open at least a year are a key measure of retailer performance because they measure growth at existing stores rather than from newly opened ones.

The increase was particularly notable, given that many retailers are struggling to report sales growth during the weak economy.

Grom, who rates the stock "Neutral," was impressed by Nordstrom's sales increase, particularly at its online business, where sales rose in the double digits.

Grom also said sales were strong at its Nordstrom Rack unit and that basket size, or how much a shopper purchased, improved.

Sales rose 92 cents, or 2.7 percent, to $34.85 in afternoon trading.