It was a record day for Nordstrom's stock.
After beating Wall Street expectations for its more recent quarter's revenueand earnings, the upscale retailer's shares traded at an all-time high at $75.68 on Friday. They have risen 20 percent year-to-date.
But could the top be in for shares of the top-end store?
"We're a little concerned about profitability," said Erin Gibbs, equity chief investment officer at S&P Capital IQ Global Market Intelligence. She notes Nordstrom's recent acquisition of men's retail stylist Trunk Club may have strengthened the company's online presence but at the expense of profitability.
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There are other reasons to hold off on buying Nordstrom's shares, according to Gibbs, who has $13 billion in assets under advisory. "Valuations are really starting to look stretched," she said. "It's trading at about 18 times forward earnings and we're looking at about 10 percent profit growth. So it's peaking."
"It's not in our portfolio," she added. "I wouldn't look to buy it here. It is one of the better retailers – so it is a best of a challenged bunch – but I still think there are better opportunities elsewhere."
However, the technicals may say otherwise, according to the chart work of one CNBC contributor. "It's acting quite strong," said Todd Gordon, founder of TradingAnalysis.com, about Nordstrom's chart.
To make his point, Gordon looked at the ratio of the retail sector versus the overall S&P 500. He then compared a chart of that ratio with the price of oil. He notes that as oil began falling in July, retail took off higher compared with the overall market.
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While Gordon said lower-end retailers like Wal-Mart, Costco, and Target are powering the sector higher, he notes Nordstrom is moving in tandem with them. "Nordstrom happens to be trading right alongside those guys," he said. "It's quite strong."
Gordon believes Nordstrom's stock chart is targeting an even higher price than its current levels. He sees the stock as trading in a well-defined trend channel as it broke above its previous peak around $71.50 per share.
"You're going to see upper resistance a good $10 higher at about $81," he said. "While oil continues lower and while the S&P [500] continues higher, I think this chart has room to go to the upside."
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