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Is JCPenney Poised to Deliver Better Fiscal 2Q17 Results?

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Part 4
Is JCPenney Poised to Deliver Better Fiscal 2Q17 Results? PART 4 OF 4

How Wall Street Analysts View JCPenney before Its Fiscal 2Q17 Results

YTD movement

On August 4, JCPenney (JCP) stock fell 34.5% on a YTD (year-to-date) basis, a significant decline. Recent weakness in the company’s top line disappointed investors. The stock prices of rival department stores Macy’s (M), Nordstrom (JWN), and Kohl’s (KSS) fell 34.9%, 2.3%, and 15.2%, respectively, on a YTD basis.

These stocks have underperformed the S&P 500 Index, which has risen 10.6% since the start of 2017.

How Wall Street Analysts View JCPenney before Its Fiscal 2Q17 Results

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Analysts’ recommendations

On August 4, JCPenney (JCP) stock was rated “hold” by 14 (61%) of 23 analysts. JCP stock is rated “buy” by seven analysts and “sell” by two analysts. On June 26, Gordon Haskett upgraded JCPenney stock to “hold” from “reduce” with a price target of $4.50.

JCPenney and its department store peers are struggling in a tough retail environment where Amazon (AMZN) is attracting more consumers. JCPenney is trying to win additional customers by focusing on growth categories like beauty and home appliances. 

Sephora, which is owned by LVMH Moet Hennessy Louis Vuitton SE (LVMUY) (MC.PA), is a vital part of the company’s growth strategy. In fiscal 2016, JCPenney opened 60 additional Sephora stores within its locations, bringing the total Sephora store count to 577. 

JCP plans to add 70 new Sephora stores and expand 32 existing stores in fiscal 2017. JCPenney is also expanding the assortment of beauty products and brands available in the Sephora stores within its locations.

JCP is also focusing on boosting its online business by improving site functionality, expanding its merchandise assortment, enhancing its ship-from-store capabilities, and improving its mobile app.

12-month price target

On August 4, the 12-month price target for JCPenney stock was $6.77. This estimate reflects a 24% upside potential compared to the company’s closing stock price of $5.44 on August 4.

For more updates, please visit Market Realist’s Department Stores page.

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