J. C. Penney (JCP) Nov. Comps Viewed as Solid but it 'Gets Tougher from Here' - Deutsche Bank
Tweet
Share
E-mailGet Alerts JCP Hot Sheet
Price: $0.18 --0%
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Join SI Premium – FREE
Deutsche Bank maintained a Hold rating on J. C. Penney (NYSE: JCP) with a price target of $6.00. Comments follow data on November comps yesterday that showed a gain of 10.1%. Analyst Paul Trussell noted the print was above expectations but in his view thing get "tougher from here."
"The results were solid, in our view, as it was above our expectations for +9.0% and showcases continued acceleration in trends. To this point, SSS rose 0.9% in October (its first positive comp since 12/11), representing a 490 bps sequential improvement from September’s results. JCP noted that the strength was mainly driven by improved store traffic and conversion as well as continued strength in online sales," said Trussell.
"We applaud JCPenney management for the progress in its turnaround efforts to date, but given the easy comparison (we estimate November 2012 was down ~37%) which included cycling Sandy and not having a promotional strategy for Black Friday a year ago – we wonder whether results can actually get better from here. With November 2012 confirmed by management as the worst month during the period a year ago, we believe SSS may moderate from here as JCP cycles home clearance and Friends & Family events last December, deep discounting in January 2013 to make room for Joe Fresh and the return of its promotional strategy in March/April. We are modeling (no change) 8.0% comps in December, 6% comps in January, and 5% comps in FY14. While our SSS estimates are solid on a relative basis, they fall well short of returning JCP to a $15+ billion sales entity, which is what we believe is needed for the Bull case to continue at current levels," he added.
For an analyst ratings summary and ratings history on J. C. Penney click here. For more ratings news on J. C. Penney click here.
Shares of J. C. Penney closed at $10.11 yesterday.
"The results were solid, in our view, as it was above our expectations for +9.0% and showcases continued acceleration in trends. To this point, SSS rose 0.9% in October (its first positive comp since 12/11), representing a 490 bps sequential improvement from September’s results. JCP noted that the strength was mainly driven by improved store traffic and conversion as well as continued strength in online sales," said Trussell.
"We applaud JCPenney management for the progress in its turnaround efforts to date, but given the easy comparison (we estimate November 2012 was down ~37%) which included cycling Sandy and not having a promotional strategy for Black Friday a year ago – we wonder whether results can actually get better from here. With November 2012 confirmed by management as the worst month during the period a year ago, we believe SSS may moderate from here as JCP cycles home clearance and Friends & Family events last December, deep discounting in January 2013 to make room for Joe Fresh and the return of its promotional strategy in March/April. We are modeling (no change) 8.0% comps in December, 6% comps in January, and 5% comps in FY14. While our SSS estimates are solid on a relative basis, they fall well short of returning JCP to a $15+ billion sales entity, which is what we believe is needed for the Bull case to continue at current levels," he added.
For an analyst ratings summary and ratings history on J. C. Penney click here. For more ratings news on J. C. Penney click here.
Shares of J. C. Penney closed at $10.11 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Amazon.com (AMZN) PT Raised to $215 at UBS
- Meta Platforms Inc. (META) PT Lowered to $575 at UBS, 'shares are offering a 3-to-1 skew'
- Keurig Dr Pepper (KDP) PT Raised to $39 at Jefferies
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Retail SalesRelated Entities
Deutsche BankSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
