Citi Reiterates Buy Rating On JC Penney

According to Citi, JC Penney

management was upbeat at Citi's conference, citing the fact that all 19 of its growth initiatives exceeded plan in 1Q11. Citi said that JCP will also be increasing its investment in the center core, which has 3x the sales productivity of the overall store. “New price, markdown, and size optimization tools will be rolled out this Fall and are expected to maintain JCP's historically high gross margin rate despite any inflation pressures. Additionally, marketing and store labor expense reductions could provide additional EPS upside. Our $2.40 2011 EPS estimate is above consensus of $2.23. We reiterate our Buy rating and $52 target price. The stock is also on Citi's Top Picks Live! list.” JC Penney closed yesterday at $36.11.