Nordstrom stock earned a thumbs-up from Argus Research, which says better days are ahead for the luxury department store.

Analyst Kristina Ruggeri upgraded her rating on the stock to Buy from Hold, with a price target of $23.

Earlier this month, Nordstrom (ticker: JWN) posted fourth-quarter adjusted earnings of 74 cents a share, while analysts had penciled in earnings of 67 cents a share, according to FactSet. Total net sales for fourth quarter slid 4.1% year over year.

The company "has been hurt by weaker economic conditions, unproductive inventory, and soft sales to lower-income customers," Ruggeri wrote in an analysis dated March 7. "However, it has also divested unprofitable businesses and reduced unwanted inventory through discounts and promotions." The analyst pointed to the recently announced closure of the retailer's Canadian business.

Nordstrom shares were little changed around $19.57 on Wednesday. So far this year, the stock has jumped 21%.

"We expect stronger results in the coming quarters and believe that JWN shares offer a buying opportunity," Ruggeri wrote.

The company is on the lookout for partnerships "that will provide a broader product offering for customers without increasing inventory or requiring additional labor," she said. It launched one such partnership in November 2021 with Fanatics, a seller of sports apparel and merchandise.

Nordstrom is also working on resonating with its younger customers and is furthering its online presence through the Nordstrom Media Network, "which allows brand partners to connect with Nordstrom customers," she added.

Nordstrom's retail peers offered a mixed bag of performance on Wednesday, with shares of Macy's (M) falling 0.3%, Kohl's (KSS) slipping 0.4%, and Dillard's (DDS) rising 0.2%.