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J.C. Penney Company, Inc. (JCP) To Post Improved Q2 Results

By Mani
Updated on

Bernard Sosnick of Gilford Securities anticipates retailer J.C. Penney Company, Inc. (NYSE:JCP) to post improved second quarter performance.

J.C. Penney Company, Inc. (JCP) To Post Improved Q2 Results

In their follow-up report titled ‘July Clearances: Less Than A Year Ago’, the analyst feels clearer evidence on J.C. Penney Company, Inc. (NYSE:JCP)’s performance would emerge during the second half of 2013. Bernard Sosnick anticipates any improved performance would trigger a rally to take the retailer’s stock from $20 to $25 level.

Reiterating the research firm’s earlier predication in their July 2 report, the analyst notes the gross profit margin for J.C. Penney Company Inc (NYSE:JCP) might see modest rebound in the second quarter.

Anticipates normalized clearance rate of 15-16 percent

Bernard Sosnick notes one should not be surprised to see shoppers clustered at the clearance stocks during mid-July. Bargain shoppers would come out between seasons. The research firm reiterated its earlier prediction in its July 2 report of achieving a normalized clearance rate of 15 to 16 percent during second half of 2013.

The analyst further observes the retailer’s gross margin would be under pressure during the second quarter of 2013, though clearance activity in July appears less than a year ago.

Reiterating their earlier prediction for 2Q 13, Gilford Securities notes shoppers are responding to the return of promotional inducements, with improved footfalls seen during key shopping dates.

Improved sales during September and October for J.C. Penney

Bernard Sosnick of Gilford Securities also reiterated the earlier prediction of significant improvement in sales during September and October, on the back of promotional events on Labor and Columbus Days.

Enthused by the anticipated good performance, Bernard Sosnick of Gilford Securities in his recent report assigns ‘Buy’ rating on J.C. Penney Company, Inc. (NYSE:JCP).

However, the analyst foresees J.C. Penney facing macro-economic risks germane to the retailer industry. The analyst envisages J.C. Penney facing a primary risk in terms of financials. However, the financial risk got diluted thanks to the retailer securing $2.25 billion through a new loan agreement.

Bernard Sosnick feels the retailer new CEO Ullman’s first actions have been encouraging, though these haven’t yet assured a favorable outcome for the retailer.

In the recent report, Bernard Sosnick anticipates J.C. Penney Company, Inc. (NYSE:JCP) to record an EPS of 1.40 and P/E of 11.6 times its earnings for the year 2015, while the retailer’s EPS and P/E are anticipated at 0.71 and 23 for the year 2014.

In his earlier report titled ‘J.C. Penney One Step at a Time: Giant Steps Likely to Come’, Bernard Sosnick observed the worst appears to be over for the retailer.

Earlier, we carried an article from Ike Boruchow of Sterne Agee focusing not only on J.C. Penney Company, Inc. (NYSE:JCP) business but also on the other retailer’s competitors

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