There seems to be no light at the end of the tunnel right now for J.C. Penney Company, Inc. (NYSE:JCP).
Once again, financial
struggles have left the company looking for a way out and the company has chosen to replace current Chief Financial Officer, Ken Hannah, with the retail veteran, Ed Record. Ed will step into the position on March 24th, and will be busy trying to put back together the empire JCP once held. Analysts have been following JC Penney’s fall down the charts, making recommendations along the way. This Throwback Thursday let’s take a look at a few recommendations about JCP to see how well analysts performed in the wake of the company’s decline.
Following Thanksgiving of 2013, J.C. Penney Company, Inc. (NYSE:JCP) reported some positive numbers, but not all analysts were not convinced that these numbers foreshadowed a turnaround. Wells Fargo analyst Paul Lejuez recommended SELL JCP, revealing the truth behind the holiday results, “While FQ4 2012 comps declined 32%, November was the worst month of the quarter last year (we estimate -34%). Therefore, we believe the November comp may be as good as it gets in Q4 2013.” At the same time, Deutsche Bank analyst Paul Trussell recommended HOLD JCP, relying on a supposed “acceleration in trends” to continue JCP’s new found strength. However, despite Paul Trussel’s optimism, the stock did take another dip and Paul Lejuez walked away with +25.8% over S&P-500. Paul Lejuez is ranked 12 out of 2396 analysts and has a 4.6% average return over S&P-500.
J.C. Penney Company, Inc. (NYSE:JCP) tried to put on a brave face when discussing its results following the rest of the holiday season, saying that, “the company is pleased with its performance for the holiday period, showing continued progress in its turnaround efforts.” However, Paul Lejuez was once again quick to point out the reality of the situation, “As we have previously written about (in our December 18 note ‘What If December Disappoints?’), the calendar artificially boosted November comps and we expected a big slowdown in December. Seems like we got it.” Paul recommended SELL JCP and he was not alone in his assessment of the situation. Belus Capital analyst Brian Sozzi also recommended SELL J.C. Penney Company, Inc. (NYSE:JCP) after realizing the truth of the matter. Brian is ranked 86 out of 2396 analysts and has a 5.0% average return over S&P-500. Both analysts received high positive returns for their SELL recommendations. Paul earned +24.6% and Brian earned +26.0% over S&P-500.
Even back in October of 2013, Paul recognized that JCP was going to have a very hard time trading where it once was and said, “If Q4 comps aren’t positive, we will likely move into a different phase of problems (liquidity concerns, customers gone for good, etc.).” Paulrecommended SELL JCP well before the holidays began and ended up being on the right track, earning +17.9% over S&P-500.
At the beginning of J.C. Penney Company, Inc. (NYSE:JCP)’s decline back in February of 2012, the stock began to trend upwards around July 2012, leading analyst Deborah Weinswig to recommend BUY J.C. Penney Company, Inc. (NYSE:JCP). Following a new store-layout to turn around sales, Deborah explained that stores, “will offer a shopping experience unlike any other in apparel retailing.” Deborah’s hopeful outlook at the time earned her +26.2% over S&P-500.
But when the company continued to decline for months after attempting this dynamic shift in stores, Deborah recommended SELL J.C. Penney Company, Inc. (NYSE:JCP). Despite JCP’s efforts Deborah noted in August of 2013 that, “JC Penney is experiencing some weakness in its home business, as stores with its new home shops had lower traffic than those without the shops.” Deborah’s recommendation earned her +5.0% over S&P-500. Deborah is ranked 65 out of 2403 analysts and has a 3.8% average return over S&P-500.
J.C. Penney Company, Inc. (NYSE:JCP)’s new CFO might have a trick up his sleeve to turn things around for JC Penney,but as of right now, it might be best to stick with the analysts who have a clear understanding of JCP’s reality. Before you make any decisions be sure to review each analysts’ profile by downloading TipRanks, and start making informed financial decisions with advice you can trust.
