CFRA MAINTAINS STRONG SELL OPINION ON SHARES OF J.C. PENNEY COMPANY, INC.
1:07 pm ET March 28, 2019 (CFRA) Print
JCP plans to close 27 stores in 2019, including 18 full-line department stores and 9 home and furniture stores. According to unconfirmed reports by Business Insider on March 26, the store closures will span at least 13 states, including Michigan, California, Florida, Georgia, North Carolina and Missouri, with most closings taking place by July 5. The outlet cited government filings, information from employees of closing stores and local reports. In our view, JCP's heavy reliance on store closings and asset sales will result in further brand erosion, while the company's deteriorating solvency position will continue to challenge JCP's need to invest in modern enterprise technologies, experiential offerings and bold marketing campaigns in order to keep pace with the evolving consumer. (On March 5, S&P downgraded JCP's credit rating to CCC+; Outlook Negative.) We keep our 12-month target at $1.00. We use a total enterprise value to our FY 20 (Jan.) revenue multiple of 0.4x, below peers.
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