JC Penney's Risk/Reward Favorable Following Recent Pullback Below $7
1:03 pm ET January 17, 2017
Baird remains Outperform-rated on J C Penney Company Inc (NYSE: JCP) saying the risk/reward on shares is favorable following the recent pullback below $7.
“While the path to +LSD% comps will likely be an uphill climb, we view risk/reward as favorable following the pullback to ~$7 (would trim positions if reach low-double-digit range),” analyst Mark Altschwager wrote in a note.
That said, the analyst is more cautious on the top-line outlook given significant sector/apparel headwinds. But, he believes JC Penney still has opportunity to reach $1.2 billion in EBITDA in 2017.
Altschwager expects JC Penney to provide formal guidance on the fourth quarter call and reiterate its $1.2 billion EBITDA target.
“Still, near $7 we believe shares reflect a more skeptical view, supporting an attractive risk/reward,” Altschwager added.
At last check, shares of JC Penney gained 4.14 percent to $7.04. The analyst has a price target of $11.
