J.C. Penney Company, Inc. (NYSE:JCP) might be one of the worst performing department-store stocks this year, but analysts aren’t giving up hope on the stock, just yet.

J.C. Penney in the News

Next week, J.C. Penney Company, Inc. (NYSE:JCP) will announce its Q1 results, and already investors are seeing encouraging signs. Over the past three months, JC Penney stock has gained +47%, and one of the retailer’s suppliers reported seeing positive business developments from sales at J.C. Penney. So what are analysts saying before the numbers are revealed?

What Does This Mean for JC Penney’s Stock?

Piper Jaffray analyst Neely Tamminga reiterated her BUY rating and $11 price target on J.C. Penney Company, Inc. (NYSE:JCP) before the Q1 report. Neely argued, “In our upgrading J.C. Penney shares earlier this year we held, and continue to hold, a few, but critical, beliefs as to what we see as J.C. Penney’s opportunity to improve their sales and margins, and ultimately, their cash flow over time.” Neely sees potential in the company and is ready to see J.C. Penney bounce back over time. Neely has a +4.2% average return over S&P-500 and a 75% success rate recommending stocks.

Neely’s last J.C. Penney Company, Inc. (NYSE:JCP) recommendation from January this year, brought her +13.1% over S&P-500. The stock had just climbed 3.7% and Neely recommended BUY noting that “2014 will be a year of progress for the retailer.” Will Neely’s latest BUY J.C. Penney recommendation prove her right?

Analyst Michael Binetti and his team over at UBS recently upgraded his SELL JC Penney recommendation to a HOLD rating. Michael also sees the makings of a comeback, arguing, “In our view, [J.C. Penney] has less “miss & lower” risk on [same-store sales/gross margins] in 1H14 while lapping significant one-time drags from extremely high clearance levels—and having 19% of total sq. footage under construction—in 1H13. In our view, the stock debate shifts to 2H14, when these one-time tailwinds abate and [J.C. Penney] will once again be tested on whether it can drive significant traffic back to stores as YOY comparisons normalize.” While he sees less risk in the near-term, Michael still sees some risk and only recommends HOLD. Michael has a +1.0% average return over S&P 500 (INDEXSP:.INX) with a 45% success rate of recommendations.

J.C. Penney Company

Conclusion

J.C. Penney Company, Inc. (NYSE:JCP)’s Q1 results come out tonight, but these analysts are ready with their recommendations now: BUY or HOLD JC Penney.

Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]