JC Penney (JCP) Easy Comps Not Enough to Fix Industry Pressures - UBS
UBS analyst, Michael Binetti reiterated his Sell rating on J. C. Penney (NYSE: JCP) as the company plans for 2H SSS to accelerate despite comps getting tougher. JCP's 1Q SSS slowed significantly, w/transactions & AUR both negative. 1Q was the 1st negative YOY gross profit dollar decline during JCP's turnaround.
Despite the negatives, JCP (and KSS) held '16 guidance. Unlike JCP, M & JWN both lowered guidance to reflect current trends.
JCP is the only department store to face sequentially tougher SSS compares in 2H (SSS compares get +1.4pp harder in 2H vs 1H). While JCP commented that recent trends have improved, the overall negative industry tone this week leaves us more cautious about the sustainability of any NT trend improvement.
No change to Sell rating, PT drops to $7 from $8.
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 $7.58 yesterday.