Morgan Stanley Comments on J.C. Penney Following Analyst Day

Early Thursday morning, Morgan Stanley analyst, Kimberly Greenberger reiterated an Underperform rating an $7 price target for J.C. Penney Company, Inc.

. According to Greenberger, J.C. Penney's management highlighted three areas- Cennter core, Home, and Omni-channel -they believe will be key for growth. Although Greenberger agrees these should be the areas of focus, she feels management's assessment may over exaggerate the magnitude of these opportunities. Included in the company's goal for the next three years was: the addition of $2.1 billion in sales, an increase in gross margin to 36.5 percent, flat SG&A expense, and $1.2 billion in 2017 EBITDA. Greenberger says these targets appear aggressive given the company's modest comparable sales. Despite the note from Morgan Stanley, shares of J.C. Penney are trading up slightly. However, this slight move up comes after the shares got hammered yesterday, falling almost 11 percent.