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UPDATE: Buckingham Research Doubts J.C. Penney Credibility and Recovery

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In a report published Friday, Buckingham Research Group analyst David Glick downgraded J.C. Penney Co. (NYSE: JCP) from Buy to Neutral and significantly lowered the PT from $20 to $10.

Yesterday, JCP announced Goldman Sachs is underwriting their public equity offering for 84M shares. Initial offering was priced at $9.65 a share, approximately $811M (before fees) and 40% dilution for existing shareholders. Glick noted, “The underlying reasons for this sudden need for expensive capital, the damage to JCP's credibility, and the more challenging than expected consumer environment all pose threats to the pace of JCP's recovery.”

Buckingham Research Group reported their doubts of management's credibility, JCP's overall recovery, operating projections, and stability during the holiday period. Further, the analyst is concerned with the repercussion of the earlier public announcement where JCP commented that they do not need to raise capital.

Glick forecasted FY13 EBITDA estimates of $604M and FY14 EBITDA estimates of $163M.

JCP closed at $10.42 on Thursday.

Latest Ratings for JCP

DateFirmActionFromTo
Sep 2014Imperial CapitalMaintainsUnderperform
Aug 2014BTIG ResearchDowngradesBuyNeutral
Aug 2014Craig-HallumUpgradesSellHold

View More Analyst Ratings for JCP
View the Latest Analyst Ratings

Posted-In: Buckingham Research David GlickAnalyst Color Downgrades Analyst Ratings

 

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