Market Overview

JC Penney's Pre-Announcement Disappoints As Margins Stay Under Pressure

JC Penney's Pre-Announcement Disappoints As Margins Stay Under Pressure

Analysts at Susquehanna Group are no longer bullish on J C Penney Company Inc (NYSE: JCP) after the department store disappointed investors in an update last week. The firm's Bill Dreher downgraded JC Penney's stock rating from Positive to Neutral with a price target slashed from $6.50 to $3.00.

JC Penney's third-quarter update and full-year fiscal 2017 outlook made it clear that the company continues to face gross margin pressures and various initiatives to boost sales are taking longer than expected, the analyst wrote in the downgrade note. As such, the company will continue to be in a position where its free cash flow will be allocated to pay down its debt load.

Following the disappointing announcement, JC Penney's stock was trading at a 10.4x multiple based on the analyst's revised fiscal 2018 earnings per share of 30 cents (versus a prior estimate of 54 cents). this still marks a premium versus the overall department store group at 10x excluding JC Penney so shares are no longer attractive to buy. In fact, the analyst no longer holds a constructive rating within the entire department store sector.

The best investment opportunity available within the retail space continues to be Wal-Mart Stores Inc (NYSE: WMT), Dreher wrote (see his track record . The company continues to see "remarkably strong" momentum as the leading omnichannel retailer.

At time of publication, shares of JC Penney were down 10.1 percent at $2.81.

Related Links:

The Concerning Mixed Message JC Penney Is Sending To Consumers Resulted In A Downgrade

8 Stocks To Follow On JC Penney's Concerning Outlook
Image Credit: Michael Rivera (Own work) [CC BY-SA 3.0 (], via Wikimedia Commons

Latest Ratings for JCP

Nov 2019B. Riley FBRMaintainsNeutral
Mar 2019B. Riley FBRMaintainsNeutralNeutral
Dec 2018CitigroupInitiates Coverage OnUnderweight

View More Analyst Ratings for JCP
View the Latest Analyst Ratings


Related Articles (JCP)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings News Guidance Downgrades Price Target Analyst Ratings Movers Best of Benzinga

Latest Ratings

TYGB of A SecuritiesUpgrades
ZIONB of A SecuritiesMaintains39.0
RFB of A SecuritiesMaintains13.0
PNCB of A SecuritiesMaintains123.0
HBANB of A SecuritiesMaintains11.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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