After Thursday's market close, the retailer reported earnings of 39 cents a share, above Wall Street's estimates of 23 cents a share. Revenue was $4 billion for the quarter, beating expectations of $3.99 billion.
Following the release, Citigroup pointed out that J.C. Penney is the most attractive department store stock for the near term, Barron's reports.
Although the firm cheered J.C. Penney's expense savings, it warned that the company "remains a highly levered retailer in a tough sector and the stock value is highly sensitive to small changes in comps."
Specifically, J.C. Penney increased the number of Sephora shops in its stores by 28 to 115 last year, he noted. The department store plans to add Sephoras to about 60 more of its stores this year.
J.C. Penney also has launched a pilot program of selling appliances in 22 stores and has begun to test a buy online, pick up in stores model at certain locations, Sozzi continued.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
J.C. Penney's weaknesses include its generally high debt management risk, disappointing return on equity and decline in the stock price during the past year.
You can view the full analysis from the report here: JCP
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.