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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 112.18 -1.77 -1.55 35,887,940
JCP J.C. Penney Company Inc. Holding Company 9.25 -0.30 -3.14 16,450,944
WFD Westfield Financial Inc. 7.58 -0.01 -0.13 43,525

Comments

Emerging Growth

International Western Petroleum Inc

International Western Petroleum Inc is an exploration-stage oil and natural gas company. The Company is engaged in the acquisition, development, and exploration of crude oil and natural gas properties in…

Private Markets

Cloudera

Cloudera offers enterprises a new data platform built on the Apache Hadoop open-source software package. Hadoop is a data-management platform that can consolidate data in a single repository for comprehensive…

Trustify

Trustify provides trust and safety in both the digital and physical worlds through our vast network of on-demand Private Investigators.By removing the large retainers and high hourly rates that traditional…