Seeking Alpha

Wells Fargo rains on J.C. Penney turnaround parade

  • Wells Fargo downgrades J.C. Penney (JCP) to an Underperform rating.
  • The investment firm thinks the heavy debt burden of the retailer greatly limits upside potential.
  • The price target on JCP is dropped to $5 by Wells, indicating shares could see a sharp sell-off.
  • JCP -1.7% premarket to $9.20.
Comments (7)
  • Quoth the Raven
    , contributor
    Comments (2071) | Send Message
    If only someone had said this yesterday...

    20 May, 08:35 AM Reply Like
  • User 12690101
    , contributor
    Comments (13) | Send Message
    Wow, looks like some shorting parties need a little hand.
    20 May, 09:14 AM Reply Like
  • Claus Behnke
    , contributor
    Comments (15) | Send Message
    Wells gave a credit line with other banks to JCP. To put JCP to "underperform"
    makes little sense knowing the improvements in gross margin, sales, liquidity and EPS. JCP will be the next Best Buy....
    20 May, 09:37 AM Reply Like
  • mycatsmokey
    , contributor
    Comments (12) | Send Message
    About all JCP can really do well is give a false sense of security by conference calls trying to make investors believe it is getting stronger on its own merits.Back when JCP was in the $40.00 range there was no debt to speak of.Just look at the heavy burden of debt now!!!No need to say more.
    20 May, 12:39 PM Reply Like
  • techy46
    , contributor
    Comments (6065) | Send Message
    It's still not a bad time to buy at $9 and sell those Jan 16 $10 calls for $2 for downside coverage to $7, return of 22% for 18 months or 33% if you get called out.
    20 May, 12:22 PM Reply Like
  • Martin_Kostka
    , contributor
    Comments (15) | Send Message
    33%... Didn't you mean 11% if you get called out?
    21 May, 12:00 PM Reply Like
  • mycatsmokey
    , contributor
    Comments (12) | Send Message
    I am just an interested person in wanting investors to give serious consideration to the stocks they are interested in buying.It is so easy to be mislead by anybody who has high stakes in a company.JCP takes a great deal of pleasure in beating on a dead horse
    20 May, 12:45 PM Reply Like
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