J.C. Penney Surges on Improved Analyst Outlooks

Michael Teague |

On Monday, two different analyst reports emerged with much-needed good news for the ailing J.C. Penney (JCP) department store.

After this weekend’s launch of store-in-store installations of the Canadian Joe Fresh apparel brand, a research note from Oppenheimer & Co. noted a positive customer response, and predicted encouraging results for a similar arrangement for home furnishings that is slated to appear over the summer.

A separate note from an analyst at the ISI group went further, giving a conservative estimate that the company’s top 300 locations could bring in $1.2 billion in income from selling store space to different brands, saying “JCP’s most valuable asset is its low-cost real estate, and we believe there are many premium brands that would potentially be interested in subleasing space within the best locations at $40 per square foot”.

This is welcome news after what has been a most disastrous year for the company. Since former Apple (AAPL) executive Ron Johnson took over as CEO last year, the company has implemented a turnaround strategy that involved the discontinuation of its incredibly popular sales and coupons programs.  The subsequent loss of previously extremely loyal customers has been unprecedented, with Penney losing a staggering $958 million, or $4.49 per share last year alone.

Monday’s good news, however small compared to the size of the damage, saw shares jump almost 10 percent to an intraday high of $17.16.

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Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 109.11 -0.79 -0.72 34,331,042
WFD Westfield Financial Inc. n/a n/a n/a 0
JCP J.C. Penney Company Inc. Holding Company 9.86 0.05 0.51 19,028,438

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