Shares of Nordstrom (JWN) dropped in morning trading after shares were downgraded by JPMorgan to Underweight. The downgrade was based on relatively flat sales and no "silver bullets" on the horizon to improve trends.

NO 'SILVER BULLETS': Following a meeting with Nordstrom co-president Blake Nordstrom, Chief Financial Officer Mike Koppel and VP of Online Danny Ryder, JPMorgan analyst Matthew Boss downgraded the stock to Underweight from Neutral and lowered his price target for shares to $48 from $55. In a note to clients, Boss said that the company does not see "silver bullets" to drive sales growth. Nordstrom's top-line profile has moderated to low-to-mid single digits "with management citing tighter expense control as a near-term fix rather than long-term model solution clarifying its mid-teens ROIC target as more an 'aspiration' rather than near-term reality," the analyst added. Boss also cited "online cannibalization of bricks volume" and the increasing costs associated with the technology upgrades that are necessary to drive online traffic. For the fourth quarter, Boss predicted business will be a "continuation" of "flattish" year-to-date trends.

CASHSTAR PARTNERSHIP: Amid a shift to online shopping, Nordstrom announced this week that it has partnered with CashStar, a provider of prepaid commerce solutions, to allow shoppers digitally send each other presents. Nordstrom said that through Product eGifting, customers can shop online, select a gift and then send the gift with a personal message directly to its recipient by email.

WHAT'S NOTABLE: Retailers, including Nordstrom, have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping. Additionally, a recent Reuters report that brick and mortar stores like Nordstrom were "far from overwhelmed" on Black Friday, the start of the critical holiday season. Though Nordstrom's third quarter results beat analysts' estimates, Nordstrom recorded a $197M goodwill impairment charge in the quarter related to Trunk Club, which ships customers clothing and accessories selected by personal stylists. At the time, Nordstrom said Trunk Club "continues to deliver outsized top-line growth, current expectations for future growth and profitability are lower than initial estimates." Nordstrom said that to improve the customer experience and better position Trunk Club's business for profitable growth, "the company is making a number of operational changes."

PRICE ACTION: Nordstrom is down nearly 7% in morning trading to $51.58. Shares are up about 3.5% year-to-date.

OTHERS TO WATCH: Other apparel and mall-based retailers trading lower this morning include J.C. Penney (JCP), Kohl's (KSS), and Macy's (M).