NEW YORK (TheStreet) -- J.C. Penney (JCP) shares are up 1.7% to $7.37 on Tuesday following a note from analysts at Sterne Agee that praised the company's cutbacks but warned against a bullish outlook for the fourth quarter financial period.
Analysts at the firm are impressed with the company's improved sales trends and noted the company's 10.4% drop in inventory as a positive sign.
However, analysts at the firm are also being cautious about the company's prospects this quarter and reiterated their "neutral" rating on the stock.
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"While the J.C. Penney ship has been stabilized, the pace of comp recovery in recent quarters has been substantially below what we would have expected 12-18 months ago. Taking this into consideration, along with today's ultra-competitive retail landscape, we don't buy into the company's expectations for comp recovery (MSD = '15-'17) or LT EBITDA target of $1.2B," said the firm.
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 several weaknesses, 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."