J. C. Penney (JCP) Bonds Drop 1.9% During Trading Earnings

An issue of J. C. Penney (NYSE:JCP) debt fell 1.9% as a percentage of its face value during trading on Thursday after the company announced weaker than expected quarterly earnings. The debt issue has a 8.625% coupon and is set to mature on March 15, 2025. The debt is now trading at $90.63 and was trading at $92.48 one week ago. Price moves in a company’s debt in credit markets often predict parallel moves in its share price. The department store operator reported ($0.22) EPS for the quarter, missing analysts’ consensus estimates of ($0.20) by ($0.02). J. C. Penney had a positive return on equity of 5.65% and a negative net margin of 0.93%. The firm had revenue of $2.58 billion for the quarter, compared to analysts’ expectations of $2.62 billion. During the same period in the prior year, the firm posted $0.01 earnings per share. J. C. Penney’s revenue for the quarter was down 4.3% on a year-over-year basis.

JCP has been the subject of a number of recent analyst reports. Credit Suisse Group initiated coverage on shares of J. C. Penney in a research note on Monday, March 12th. They set an “underperform” rating and a $2.50 price target for the company. B. Riley set a $4.00 price target on shares of J. C. Penney and gave the stock a “hold” rating in a research note on Monday, March 5th. ValuEngine cut shares of J. C. Penney from a “hold” rating to a “sell” rating in a research report on Thursday, March 1st. Finally, Guggenheim reissued a “hold” rating on shares of J. C. Penney in a research report on Friday, March 2nd. Four investment analysts have rated the stock with a sell rating and seventeen have issued a hold rating to the company’s stock. J. C. Penney currently has a consensus rating of “Hold” and an average price target of $4.29.

Institutional investors have recently added to or reduced their stakes in the business. BlackRock Inc. raised its holdings in shares of J. C. Penney by 1.2% in the 4th quarter. BlackRock Inc. now owns 39,458,918 shares of the department store operator’s stock valued at $124,688,000 after purchasing an additional 467,922 shares in the last quarter. Aristotle Fund L.P. raised its holdings in shares of J. C. Penney by 420.2% in the 1st quarter. Aristotle Fund L.P. now owns 4,739,000 shares of the department store operator’s stock valued at $14,312,000 after purchasing an additional 3,828,000 shares in the last quarter. Schwab Charles Investment Management Inc. raised its holdings in shares of J. C. Penney by 4.3% in the 1st quarter. Schwab Charles Investment Management Inc. now owns 4,219,802 shares of the department store operator’s stock valued at $12,744,000 after purchasing an additional 172,468 shares in the last quarter. Contrarius Investment Management Ltd bought a new stake in shares of J. C. Penney in the 1st quarter valued at about $11,591,000. Finally, Intrinsic Edge Capital Management LLC raised its holdings in shares of J. C. Penney by 744.0% in the 1st quarter. Intrinsic Edge Capital Management LLC now owns 2,849,879 shares of the department store operator’s stock valued at $8,607,000 after purchasing an additional 2,512,208 shares in the last quarter. 77.53% of the stock is owned by institutional investors.

The company has a debt-to-equity ratio of 2.89, a quick ratio of 0.28 and a current ratio of 1.46. The firm has a market cap of $906.67 million, a P/E ratio of 12.23, a PEG ratio of 1.33 and a beta of 0.77.

About J. C. Penney

J. C. Penney Company, Inc, through its subsidiary J. C. Penney Corporation, Inc, sells merchandise through department stores. The company primarily sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, home furnishings, and large appliances; and provides services, including styling salon, optical, portrait photography, custom decorating, and home services.

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