NEW YORK (TheStreet) -- J.C. Penney (JCP) shares are down 5.6% to $7.38 in trading on Monday ahead of the retailer's earnings release later this week after the closing bell on Wednesday.
Part of the consternation surrounding the stock ahead of its release can be attributed to a bearish Barron's article over the weekend that suggested that shares could fall as much as 35% following its earnings results if there is a shortfall in its earnings growth expectations.
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The article notes that the retailer's high level of debt makes it an unattractive takeover prospect while also noting that the sales bounce the company experienced in the first half of this year appears to be fading.
The company cited low September sales when it cut its third quarter same store sales forecast in October. Analysts are expecting the company to report a net loss of 81 cents per diluted share on revenue of $2.8 billion when it reports its financial results on Wednesday.
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 some concerns, 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 generally high debt management risk and generally disappointing historical performance in the stock itself."