J.C. Penney Co. Inc. was downgraded to neutral from positive after the retailer announced a profit warning for the third quarter and full year. Its price target was lowered to $3 from $6.50. “While J.C. Penney is taking the right steps to fine-tune its footprint and merchandise mix and will continue to pay down debt with free cash flow, the sales-driving initiatives are taking longer than we expected to materialize,” wrote analysts led by Bill Dreher. Analysts say they “no longer have a constructive rating within the department store sector,” favoring Top Pick, Wal-Mart Stores Inc. . Citi also downgraded J.C. Penney, according to The Wall Street Journal. On Friday, J.C. Penney updated its guidance, saying its efforts to sell off “slow-moving” merchandise, particularly across women’s apparel, gave the company a sales books, but hurt cost of goods sold and earnings in the near-term. The announcement pulled down shares of other retailers, including Macy’s Inc. and Kohl’s Corp. . J.C. Penney shares are down 1.3% in Monday premarket trading, Macy’s shares are down 2.4% and Kohl’s shares are down 0.2%. J.C. Penney shares are down more than 63% for the last year while the S&P 500 index is up 21.4% for the period.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News