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Brian Sozzi: Wall Street Got It Wrong On JC Penney Company Inc

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Brian Sozzi: Wall Street Got It Wrong On JC Penney Company Inc
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Following J.C. Penney's (NYSE: JCP) nearly 10-percent plunge in its shares on Wednesday, Brian Sozzi of Belus Capital Advisors wrote that Wall Street “completely missed on J.C. Penney's future” following the company's investor day meeting. In an article on The Street.com, Sozzi wrote that Wall Street analysts and traders made five crucial mistakes in their bearish take following the company's meeting. Firstly, J.C. Penney “visually upgraded” its active-wear line Xersion, which could take market share from the hot athletic apparel market. Additionally, the company upgraded its high-margin private label brands to target the millennial and youth market. Second, J.C. Penney noted during its presentation that it will upgrade its stores visual environment for handbags, footwear and watches. Merchandise will be attractively displayed on fixtures, tables, mannequins and layouts.

Third, J.C. Penney plans to give consumers further “reasons to come to J.C. Penney” with “exclusive attractions.” Sales coming from Sephora's “shops in shops” within J.C. Penney's stores has risen by a double-digit percentage point in 2014. J.C. Penney announced that Sephora will be expanded to more J.C. Penney stores. At the same time, J.C. Penney will also expand its Disney (NYSE: DIS) and plans to bring the total count to 650 stores, or 60 percent of its store base. Fourth, J.C. Penney announced it will expand its ship from store capabilities throughout 2015. Once that program is completely rolled out, J.C. Penney hinted it will begin a same-day delivery service. Finally, Sozzi notes that J.C. Penney executives hinted that an announcement on sore closings could happen as soon as early 2015. In an e-mail to clients, Sozzi said that his research firm will release a new note on J.C. Penney shortly.

Latest Ratings for JCP

DateFirmActionFromTo
Dec 2016Bank of AmericaUpgradesNeutralBuy
Sep 2016GuggenheimInitiates Coverage onNeutral
Aug 2016Morgan StanleyMaintainsUnderweight

View More Analyst Ratings for JCP
View the Latest Analyst Ratings

Posted-In: Belus Capital Advisors Brian Sozzi J.C. Penney Sephora XersionAnalyst Color Analyst Ratings Best of Benzinga

 

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