Lukewarm Results Expected For J C Penney; Crowd & Experts Weigh In

Shares of J C Penney Company Inc JCP are up slightly on Tuesday, in anticipation of the announcement of the company’s first quarter financial results on Wednesday afternoon.

According to Estimize, expectations point towards a considerable year-over-year growth in earnings. However, the projections also imply a big quarter-over-quarter decline in earnings.

The Street anticipates a net loss of ($0.79) per share on revenue of $2.874 billion. The crowd is more bullish and projects a net loss of ($0.73) on per share on revenue of $2.887 billion.

The estimates overhead compare to earnings of $0.00 per share on revenue of $3.893 billion reported last quarter, and to a net loss of ($1.16) per share on revenue of $2.8 billion registered in the first quarter of 2014.

As it can be seen in the chart above, which features a history of J C Penney’s actual earnings compared to estimates, there is no clear trend to suggest if a beat or a miss should be expected this quarter.

A second chart illustrates the evolution of estimates over time. As it can be appreciated, experts’ opinion remained pretty much stable since the beginning of the year. However, the crowd has become increasingly bearish over the past couple of months.

Analysts at Sterne Agee also weighed in on J C Penney’s earnings. The firm models a net loss of ($0.71) and explains that, “With the stock seemingly blowing with the proverbial wind, we find it hard to get involved in JCP these days. Grounding shares to the fundamentals implies intrinsic value of ~$8 considering the $1.2 billion FY17 EBITDA bogey, but JCP has traded in an extraordinary $6-$11 range over a trailing 12 months that has seen a mixed bag of misses, beats, leadership changes, and an accidental comp leak to boot. Ahead of the print, with comp upside pre-announced, the focus turns to: (a) margins and (b) 2QTD trends. Accordingly, recent favorable weather could provide a ST tailwind (May temps up 3.8 degrees YOY in JCP trade areas) . . . but we remain cautious on JCP’s ability to ‘comp the comp’ over a multi-year period provided recent traffic softness.”