Citi Debunking JC Penney Bear Case

In a report published by Citi, JC Penney JCP is debunking the bear case.

Citi said that it is raising its 2011-2014 EPS estimates for JCP, raising its target price to $50, up from $46 previously, and adding the stock to CIRA's Top Picks Live! list. “We believe that JCP has a significant opportunity to narrow the sales productivity gap vs. its peers, namely KSS. In 2010, JCP's sales per net square foot were $210, above Macy's at $208 but below KSS at $230. KSS has an advantage due to the convenience of its off-mall store base. However, we believe JCP has an opportunity to drive sales productivity gains through its merchandise initiatives, particularly Liz Claiborne and MNG by Mango, the rollout of Sephora inside JCPenney, and an inflection in its higher ticket home business.”

JC Penney closed yesterday at $36.81.