J.C. Penney Company Inc (NYSE:JCP) hosted its analyst day this week to outline the retailer’s strengths and growth opportunities. With a new team palpably “energized, focused, and cognizant of industry headwinds,” Baird analyst Mark Altschwager likes what he sees. Subsequently, the analyst reiterates an Outperform rating on JCP with a price target of $13, marking a close to 26% increase from where the shares last closed.
JCP management forecasts earnings of $1.6 billion, on track for at least $1 billion for this fiscal year and over $1.2 billion in the fiscal year of 2017. Meanwhile, JCP guides earnings per share (EPS) in the range of $1.40 to $1.55. Moreover, JCP plans imply free cash flow nearing $1.2 billion over the “planning horizon.” With great respect for the new JCP leadership and their fresh vision for the retailing company, Altschwager trusts their plans for the future all the more.
Altshcwager opines, “Overall, there were few big surprises and we doubt secular department store bears will run for the hills. However, we believe the team has earned the benefit of the doubt with steady execution amid a tough landscape. We continue to favor JCP as a tactical opportunity (visible growth levers, easy 2H industry comparisons) and look to gain further confidence in a longer-term “buy-and-hold” thesis as management demonstrates progress toward goals.”
The analyst concluded, “We remain bullish on shares near term as fundamental catalysts (improving comps, cash flow, balance sheet) continue to unfold.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Mark Altschwager is ranked #757 out of 4,124 analysts. Altschwager has a 63% success rate and earns 10.8% in his yearly returns. When recommending JCP, Altschwager yields 52.7% in average profits on the stock.
TipRanks analytics demonstrate JCP as a Hold. Based on 11 analysts polled in the last 3 months by TipRanks, 3 are bullish on JCP, 6 are neutral, while 2 are bearish. The 12-month average price target stands at $10.17, marking just under a 2% downside from where the shares last closed.
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