Piper Jaffray Defends JCPenney (JCP) as Shares Down Nearly 17%

Amid a nearly 17 percent plunge in shares of JCPenney (NYSE: JCP) on the heels of worse-than-expected Q1 results Tuesday afternoon, Piper Jaffray's Jeffrey Klinefelter is defending the company and stock Wednesday morning.

The analyst cited several factors for his reiterated Overweight rating:

• a promising bunch of new brands coming, and
  
• accelerated cost reduction plans -- JCPenney noted $900 million in planned expense cuts which will be realized by the end of this year.

Klinefelter said JCPenney reporting $5 per share by FY16 remains intact.

The analyst revised the following estimates:

• reduced Q2 from a gain of 4 cents per share to a loss of 9 cents per share;
  
• raised Q3 EPS from 51 cents to 53 cents, and
  
• raised Q4 from $1.55 to $1.91.

Klinefelter maintains a $50 price target on shares of JCPenney. With the stock down to under $28 this morning, the Piper Jaffray analyst's price target represents potential upside of about 80 percent.

Visit our Analyst Ratings page to track all the market-moving analyst action on shares of JCPenney.

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