Deutsche Bank Calls Francis' Departure 'Catastrophic Blow' to JCPenney (JCP) Bull Case

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Deutsche Bank issued a concerning research note on JCPenney (NYSE: JCP) Tuesday morning following news Monday afternoon the company's Chief Marketing Officer Michael Francis will be unexpected leaving the company. The title of the firm's report, "You Just Can't Make This Stuff Up," sums up the situation well.

Deutsche Bank offered two takes on the news.

• The surprise is "a catastrophic blow to the bull case on JCP, in our view, given the short duration of time that Mr. Francis was employed at the company and the timing of his change." The firm noted the exec was "expected to be instrumental in recruiting brands into the store as the company 're-imagines the department store experience'."
  
• With the retailer's former CFO Michael Dastugue also recently leaving, "the lack of continuity within the C-Suite has to be a concern considering the company is only at the outset of its turnaround effort. Said differently, we're afraid the environment in Plano has become 'Ron's way or the highway', which is never a good culture for a company trying to find itself."

Deutsche Bank maintains a Hold rating and $26 price target on shares of JCPenney.

The stock is down more than 5 percent to around $23.04 at last check.

Track all the market-moving analyst calls on shares of JCPenney with our Analyst Ratings page.

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