Market Overview

Morgan Stanley Remains Bearish On J C Penney, Lowers Price Target

Share:

Following J C Penney Company Inc's (NYSE: JCP) third quarter results on Wednesday, Kimberly Greenberger of Morgan Stanley reiterated an Underweight rating on the retailer with a price target lowered to $5.50 from a previous $7.50.

"While there were a few positive surprises, J.C. Penney's third quarter results highlighted how difficult it is to recover both sales and gross margins in this environment," Greenberger wrote in a note to clients on Thursday. The analyst adds that the company's fourth quarter guidance appears "aggressive."

Greenberger explains that J C Penney's flat third quarter comps implies a 600 basis point sequential deceleration from the second quarter and a 110 basis point decline on a two-year stacked basis.

In the fourth quarter, J C Penney's comparisons get 680 basis points more difficult and management's 2 percent to 4 percent same-store sales guidance implies 880 to 1,080 basis points of sequential acceleration, which is "unlikely," according to Greenberger.

Greenberger previously estimated 3 percent comp gains in 2015 and 2 percent comp gains in both 2016 and 2017. However, the analyst states that these estimates appear "increasingly aggressive, particularly with much harder comparisons to come." As such, the analyst lowered her comp guidance to 2 percent in 2015, 1.5 percent in 2016 and 1 percent in 2017.

J C Penney was down 8 percent at $7.13 in the pre-market session.

Latest Ratings for JCP

DateFirmActionFromTo
Nov 2019MaintainsNeutral
Mar 2019MaintainsNeutralNeutral
Dec 2018Initiates Coverage OnUnderweight

View More Analyst Ratings for JCP
View the Latest Analyst Ratings

Posted-In: jc penney Kimberly Greenberger Morgan StanleyAnalyst Color Price Target Reiteration Analyst Ratings

 

Related Articles (JCP)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
BSBRUBSUpgrades
TGTMorgan StanleyMaintains130.0
VCMorgan StanleyMaintains52.0
URBNMorgan StanleyMaintains32.0
TENMorgan StanleyMaintains8.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Aramark Analyst Roundup On Q4 Results

UPDATE: Bank Of America Downgrades FleetMatics After A Deep Dive