J.C. Penney Retreats After Goldman Sachs Cuts Rating To Sell

NEW YORK (TheStreet) -- Shares of J.C. Penney (JCP) are falling after Goldman Sachs downgraded the stock to Sell from Neutral, citing weak fundamental trends.

WHAT'S NEW: J.C. Penney's comparative sales are slowing compared with its peers and its e-commerce growth is lagging industry norms, Goldman analyst Stephen Grambling wrote in a note to investors today. Meanwhile, the retailer's core customers have returned, but aren't spending as much at Penney's as they used to, the analyst believes. Grambling does not expect the company to achieve its multi-year outlook and he predicts that its results will miss expectations. The analyst set a $5.50 price target on the shares.

WHAT'S NOTABLE: On November 13, the day after J.C. Penney reported its Q3 results, research firm Piper Jaffray wrote that the company's Q4 comparative sales guidance of up 2%-4% was likely conservative. The firm believed that the company was well-positioned to obtain a higher percentage of middle class customers. Piper cut its price target on the name to $11 from $13 but reiterated an Overweight rating on the stock at that time.

PRICE ACTION: In early trading, J.C. Penney sank 42c, or 5.7% to $6.97.

Reporting by Larry Ramer.

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