BTIG Downgrades J. C. Penney (JCP) to Neutral

BTIG downgraded J. C. Penney (NYSE: JCP) from Buy to Neutral. Analyst Will Frohnhoefer noted the stock achieved his price target.

"We believe that the recent performance of JCP’s shares validates our original thesis: that despite the severe damage inflicted on the firm by the Johnson administration, JCP had the capital resources to avoid a bankruptcy filing and to preserve equity value. This came at great cost – an equity capital raise which we thought was more dilutive than necessary, and also an overcollateralization of their new debt facilities," said Frohnhoefer.

"Our move to neutral does not mean that we doubt that JCP will hew to the right path going forward, or that it will stop improving its sales and margins. It is simply based on valuation: JCP has achieved an 8.5x enterprise value multiple to our FY2016 forecast, which we believe values it fairly in relation to its competitors for now," 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 $11.20 yesterday.

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