NEW YORK (TheStreet) -- Shares of J.C. Penney (JCP) - Get Report are down 1.14% to $11.30 in afternoon trading on Wednesday even though the retailer's credit rating was raised today to "B" from "CCC+" at Standard & Poor's Ratings Services.

"We based the upgrade on our view that JCP's turnaround efforts are sustainable in the challenging U.S. department store environment and have positioned the company to support its current debt burden," S&P credit analysts said, Barron's reports.

While the new rating is still a speculative grade, S&P has a positive outlook on the Plano, TX-based company, which could lead to an improved rating in the future, Barron's added.

"We could raise the rating if adjusted EBITDA seems capable of reaching approximately $1.5 billion versus our base-case forecast of about $1.2 billion in 2016," analysts noted.

"Other supporting metrics for an upgrade would include prospects for positive cash flow (after capital spending) of around $200 million so that the company is well positioned to manage 2018 maturities," analysts explained.

Separately, J.C. Penney has a "hold" rating and a letter grade of C- at TheStreet Ratings because of the company's strengths, such as solid stock price performance, revenue growth and good cash flow from operations, and its weaknesses, including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

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.

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