Citigroup Raises JC Penney Price Target to $45 (JCP)
3/18/2010-Citigroup maintained its Buy rating on JC Penney (NYSE: JCP) and raised its price to target from $43 to $45 as the bank expects strong results from the retailer in the second half of 2010.
Analyst Deborah L Weinswig said, "Following our recent sourcing call with mgmt., we believe JCP is well positioned to deliver strong results in 2H10, driven by: 1) tailwinds from product cost deflation, which are greater than we previously expected; 2) the introductions of exclusives LIZ and MNG by Mango in the Fall; 3) benefits from the rollout of Sephora to 75 additional stores TY; and 4) oppty. for a turnaround in home. We were encouraged by JCP?s better-than expected Feb. SSS and expect traffic (which turned positive for the first time since June ?08) to cont. to improve, esp. in 2H, driven by the aforementioned catalysts. We are raising our EPS estimates and our target price for JCP to $45 (vs. $43 prev.) to reflect our constructive view."
The bank raised the company's 2010 EPS estimate from $1.57 to $1.65, versus consensus estimates of $1.54.
Write to Chip Brian at cbrian@tradethetrend.com
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