Wells Fargo Securities analyst Paul Lejuez said he believes the company will likely need liquidity in 2014.

"We believe JCP has been burned by the effects of a failed turnaround strategy," Lejuez wrote in a note Friday; Lejuezo has an underperform rating on the stock. "For JCP to get back to break-even from an EPS perspective, many things would have to go right, and there is no telling how long it could take. While liquidity is no longer an immediate issue, the company's turnaround is now solely dependent on its fundamentals, potentially a bigger problem."

J.C. Penney's underperformance reflects investor concerns that the company had faltered under the leadership of ex-CEO Ron Johnson, who chose to jettison the company's signature promotions in favor of "everyday low price." The move never resonated with customers, leaving the company and its stock price to suffer.

J.C. Penney replaced Johnson last month by bringing back Myron E. (Mike) Ullman as CEO, whose first order of business was to bring back sales and promotions.

"Our objective is to put J.C. Penney back on a path to profitable growth," Ullman said in his first earnings statement after being reinstated as CEO.

Ullman said on a conference call Thursday evening that another big initiative by the company is to bring its popular private-label brands that had been abandoned under previous leadership, such as St. John's Bay.

"The core of our business is the private label, private brand business," Ullman said on the company's earnings conference call. "We diminished several of the key brands during this phase and we lost a lot of traffic."

Ullman is targeting back-to-school sales as the company's first big test since taking over the company for a second time.

"We believe we will be in sufficient inventory position to vigorously compete. We're spending a lot of time making sure we get the merchandise in the stores ... getting the internet realigned, there's a lot of moving parts," Ullman said. It's a seven-week span and "I would expect us to be ready to compete across the board."

PiperJaffray analysts Alex Fuhrman and Neely Tamminga kept their hold rating on the stock given JCP's iconic brand name and the potential for "significant upside" to earnings estimates in the fourth quarter.

"Additionally, we believe continued media speculation of a buyout could limit downside," the analysts wrote in a May 17 note.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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