Nomura Securities Maintains a 'Neutral' on J.C. Penney (JCP); Stock Sale Not As Bad As Headlines Sound
JCP Hot Sheet
Rating Summary:4 Buy, 9 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38
Nomura Securities maintains a 'Neutral' on J.C. Penney (NYSE: JCP) price target of $40.00.
Analyst, Paul Lejuez, said, "A Form 4 filed after the close indicated that CEO Johnson sold 777K JCP shares on January 27 to cover a tax liability related to the 1.7MM restricted stock units (RSUs) he received when he joined JCP in June. The RSUs vested on January 27, meaning he owed taxes on the $69MM of value as of that date (not the $50MM value on the day he received them). The $32MM of proceeds from the stock sale divided by the $69MM that is considered taxable income equates to a tax rate of ~47%. While some (conspiracy theorists) may question the timing of the vesting immediately following the analyst day, Johnson actually would have been better off had they vested prior to the analyst day and before the stock increased (because he would have had a lower tax bill). We do not believe Johnson’s sale of shares to cover a tax liability diminishes his strong vested interest in the company. He continues to hold 893k shares, which are now vested (in addition to the warrants)."
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 $41.55 yesterday, with a 52 week range of $23.44-$42.29.
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Analyst, Paul Lejuez, said, "A Form 4 filed after the close indicated that CEO Johnson sold 777K JCP shares on January 27 to cover a tax liability related to the 1.7MM restricted stock units (RSUs) he received when he joined JCP in June. The RSUs vested on January 27, meaning he owed taxes on the $69MM of value as of that date (not the $50MM value on the day he received them). The $32MM of proceeds from the stock sale divided by the $69MM that is considered taxable income equates to a tax rate of ~47%. While some (conspiracy theorists) may question the timing of the vesting immediately following the analyst day, Johnson actually would have been better off had they vested prior to the analyst day and before the stock increased (because he would have had a lower tax bill). We do not believe Johnson’s sale of shares to cover a tax liability diminishes his strong vested interest in the company. He continues to hold 893k shares, which are now vested (in addition to the warrants)."
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 $41.55 yesterday, with a 52 week range of $23.44-$42.29.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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