JCPenney’s Wave of Downgrades after Fiscal 1Q17
As of May 15, JCPenney’s (JCP) stock has received a “hold” recommendation from 15 (60%) of the 25 analysts covering the stock. The stock has now received a “buy” recommendation from seven analysts and a “sell” from three analysts.
Many analysts have downgraded JCPenney’s stock after its fiscal 1Q17 results. JCPenney delivered adjusted EPS of $0.06 in fiscal 1Q17 (ended April 29, 2017), while analysts were expecting an adjusted loss per share of $0.21. It should be noted that the fiscal 1Q17 adjusted EPS of $0.06 included a net gain of $117 million from the sale of operating assets. JCPenney’s sales declined 3.7% in fiscal 1Q17.
Interested in JCP? Don't miss the next report.
Receive e-mail alerts for new research on JCP
Downgrades after the 1Q17 results
On May 15, JCPenney’s stock was downgraded by Deutsche Bank to “hold” from “buy,” and its price target was reduced to $5.50 from $9.00. On the same day, Buckingham Research downgraded JCP stock to “neutral” from “buy” with a price target of $5.00, and Robert W. Baird downgraded the stock to “neutral” from “outperform,” lowering the price target to $5.00 from $8.00.
JCPenney has been making several efforts to improve its top line, including the expansion of its Sephora beauty business and a focus on its home and appliances businesses. Despite these efforts, the company’s sales have been falling for the past three consecutive quarters.
12-month price target
As of May 15, the 12-month price target for JCPenney’s stock is $6.66. This price target reflects an upside potential of 53.5%, based on the stock’s closing price of $4.34 on May 15. As of May 15, the 12-month price target for Macy’s (M) was $27.95, which indicates an upside potential of 20.4%.
Notably, analysts now expect Kohl’s (KSS) stock to rise ~9.6% over the next 12-month period to $40.52.
We’ll discuss JCPenney’s fiscal 1Q17 sales in the next part of this series.