This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

J.C. Penney's Bandwagon Will Crash

Stocks in this article: JCP WMT TGT

NEW YORK ( TheStreet) -- Weak same-store sales, caused by (among other things) the bad weather, has soured the mood of retail stocks. But J.C. Penney  (JCP) continues its march upward. With shares up 3.8% in mid-day trading Tuesday, J.C. Penney's stock has surged 67% since Feb 5. This has occurred in a mere 22 trading sessions. That's legendary status.

J.C. Penney bandwagon hoppers are now hitching a ride to the holy grail of prosperity. 

Without a doubt, there's a feel-good story here. Plano, Texas-based J.C. Penney has been the retail sector's punching bag after the Ron Johnson experiment failed. But this has all of the makings of irrational exuberance.

One catalyst for Tuesday's surge came courtesy of positive remarks from a Citi report led by analyst Oliver Chen. While upgrading the stock to a "buy," Citigroup says there's potential for the stock to add an additional 30% upside.

Citigroup is late to the party. Meanwhile, investors who have always perceived this stock as cheap are soaking up the upgrade. Where was this "conviction" when the stock traded at $4.90 several weeks ago?

Unquestionably, the embattled J.C. Penney has taken some meaningful strides to stabilize its business. There are noticeable improvements both financially and operationally. I just don't believe retail investors are looking at J.C. Penney with the right lens.

First, to describe the company's fourth-quarter earnings report (released Feb. 26), let's stop using the term "better-than-expected." With revenue declining 2.6% year over year, and missing Street estimates, the more appropriate description was "less bad."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs