Why JC Penney (JCP) Is Down Today

NEW YORK (TheStreet) -- JC Penney (JCP) fell 1.6% to $8.74 Friday due to a breakdown in talks with Macy's (M) over a merchandising deal with Martha Stewart. Shares of Macy's rose 0.3% to $53.54.

The two department stores argued the case in court last year, and gave closing arguments in August. The companies were given time to reach a settlement, but according to the Wall Street Journal those talks have broken down.

Macy's sued JC Penney and Martha Stewart Living Omnimedia (MSO) in 2012 when the two companies announced a partnership for branded Martha Stewart shops inside the department store. Macy's argued the partnership breached its contract with Martha Stewart that gave it exclusive rights to Martha Stewart-branded products.

Macy's and Martha Stewart Living Omnimedia reached a settlement earlier this week.

TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate PENNEY (J C) CO (JCP) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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