Wells Fargo Securities Says J.C. Penney Company's "Simple" Stack Analysis Could be Misleading

In a report published Wednesday, Wells Fargo Securities analyst Paul Lejuez reiterated an Underperform rating on

. In the report, Wells Fargo Securities noted, “JCP indicated November comps were +10.1% (and mgmt indicated Black Friday weekend was consistent with the month). This compares to Aug -9.8%, Sept -4.0%, Oct +0.9%. November results were consistent with our ests (and we maintain our FQ4 comp est of +7-9%). While FQ4 2012 comps declined 32%, Nov was the worst month of the qtr last year (we estimate -34%). Therefore, we believe the Nov comp may be as good as it gets in Q4 2013. Importantly, we believe many are likely to misread the magnitude of the acceleration in trend in Nov. Using “simple” stack analysis, it appears Nov accelerated by 700bps vs. FQ3. The ‘real' math shows it was only 230bps.” J.C. Penney Company closed on Tuesday at $10.11.