UPDATE: Bank of America Raises Rating on JCPenney to Neutral Due to Stable Capital Structure

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Bank of America (BAC) published a report on JCPenney (JCP) where they changed their rating on the company from underperform to neutral due to a normalized capex runrate. Lorrain Hutchinson and Jessica A. Lebo reported that "JCpenney is in the process of securing a $1.75bn term loan and tendering $254mn of 7.125% notes due 2023, which should ease near term liquidity concerns." As a result JCP is expected to reinstate coupons, promotions, and more traditional marketing techniques which should reverse its recent sales declines. Furthermore BAC raised its price objective on the company to $20. JCP is not expected to be free cash flow positive until 2015. JCP traded at $18.80 as of 2:34 pm (EST)
Posted In: Analyst ColorUpgradesAnalyst RatingsBank of America Merill Lynch
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