J C Penney stock skyrocketed on Wednesday after the department store chain pre-announced its holiday sales surprise, climbing more than 20%. Unsurprisingly, analysts are ecstatic, and the company has earned price target increases from at least two firms.

J C Penney Price Targets Upped By Deutsche Bank, JPMorgan

“Room to run” at J C Penney

In their report dated Jan. 7, 2015, JPMorgan analyst Matthew Boss and his team increased their price target for J C Penney from $7 to $9 per share. They maintained their Neutral rating on the department store chain, however.

J C Penney’s same store sales in November and December increased 3.7%, and management upped their guidance to the high end of their previously provided range of between 2% and 4%. The JPMorgan team pointed out that same store sales comparables are easing, with last year’s January comparable down by 3.5%. Wall Street has already set the bar very low, as most expect an increase of 1% to 2%. JPMorgan analysts estimate that every point of multi-year comparison amounts to about $1 to $2 in equity value.

After speaking with management, the analysts said they expect the retail chain’s store consolidations to be bigger, with 100 stores being accretive to EBITDA by $150 million. They think this is likely early in the 2015 fiscal year.

Deutsche Bank adjusts estimates for J C Penney

In a separate report also dated Jan. 7, 2015, Deutsche Bank analysts Paul Trussell and Tiffany Kanaga said they had expected an update on holiday sales from J C Penney management. However, they were “pleasantly surprised” with the growth rate and increased guidance.

Previously, they had estimated fourth quarter comparable store sales to rise 2.5%, but they bumped that estimate up to 4%. Unlike analysts at JPMorgan, the Deutsche Bank team expects a “robust” January compared to last year because last year’s sales were plagued by horrible weather.

They also note that the retail segment as a whole seems to have done better in the holiday quarter than in other recent years. They say lower gas prices likely resulted in higher discretionary spending among consumers with lower incomes.

Deutsche Bank analysts upped their price target for J C Penney from $8 to $9 per share and maintained their Hold rating on the struggling department store chain.

Shares of J C Penney edged downward as much as 1% in premarket trading this morning.