UPDATE: JP Morgan Raises J.C. Penney (JCP) Credit Rating to Overweight
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Price: $0.18 --0%
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 21 Hold, 11 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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(Updated - May 8, 2013 9:30 AM EDT)
JP Morgan raised J.C. Penney's (NYSE: JCP) credit rating to overweight. The credit upgrade follows prelim Q1 results reported yesterday. Analyst Carla Casella summarized the bank's views by saying "liquidity trumps negative EBITDA."
"With $1.75 billion committed TL, we believe JCP has liquidity to complete (or to modify) its shop-inshop transformation. This trumps the fact that EBITDA may be a cash burn this year and that we don't expect it to generate free cash flow in 2014," said Casella.
JP Morgan sees JCP burning $1 billion in cash in 2013 another $300 million in 2014.
Commenting specifically on the upgrade Casella said, "We believe the next events are biased toward the positive (including the TL syndication, and hearing from new management during next week's earnings call) and will drive bonds and CDS tighter, particularly the front end of the structure."
JP Morgan raised J.C. Penney's (NYSE: JCP) credit rating to overweight. The credit upgrade follows prelim Q1 results reported yesterday. Analyst Carla Casella summarized the bank's views by saying "liquidity trumps negative EBITDA."
"With $1.75 billion committed TL, we believe JCP has liquidity to complete (or to modify) its shop-inshop transformation. This trumps the fact that EBITDA may be a cash burn this year and that we don't expect it to generate free cash flow in 2014," said Casella.
JP Morgan sees JCP burning $1 billion in cash in 2013 another $300 million in 2014.
Commenting specifically on the upgrade Casella said, "We believe the next events are biased toward the positive (including the TL syndication, and hearing from new management during next week's earnings call) and will drive bonds and CDS tighter, particularly the front end of the structure."
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