NEW YORK (TheStreet) -- Shares of J.C. Penney Co. (JCP) were slipping, down 5.51% to $8.23 on heavy volume in mid-morning trading Thursday, following the release of the department store's first quarter financial results after the closing bell on Wednesday.
Still, J.C. Penney had its price target increased to $15 from $14 by analysts at Piper Jaffray this morning.
The firm maintained its "overweight" rating on shares of the retailer, calling its first quarter financial results "solid."
For the first quarter, J.C. Penney posted a narrower than expected loss of 57 cents per share, compared to the loss of 76 cents per share consensus estimate, according to analysts surveyed by Thomson Reuters.
Revenue came in at $2.86 billion for the period, matching the $2.86 billion analysts were expecting.
The company also raised its full year margin and same store sales guidance. It now expects comp sales to rise between 4% to 5%, up from its prior guidance of a rise of between 3% to 5%.
The retailer expects gross margin to improve between 100 to 150 basis points, up from its previous guidance of 50 to 100 basis points.
Plano, Texas-based J.C. Penney is a holding company with its business consisting of selling merchandise and services to consumers through its department stores and its Internet site.
The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside J.C. Penney, and home furnishings.
Insight from TheStreet's Research Team:
Brian Sozzi commented on J.C. Penney in a recent post on RealMoney.com. Here is what Sozzi had to say about the stock:
J.C. Penney's Sephora cosmetics business remains on fire, and is a hidden gem within the company. Later this month, the business will finally receive its own website in concert with J.C. Penney, which I believe will be a nice profit win for the company. But the success with Sephora underscores that consumers are back to buying impulse items.
Yes, cosmetics have to be replenished, but Sephora is a pricier trip in many cases than to Target (TGT) or Wal-Mart (WMT). This willingness to spend on wants instead of needs bodes well for the warmer weather months, and is something I hear is playing out in my talks with PepsiCo (PEP), Newell Rubbermaid (NWL) and various other packaged-goods companies. I'm a big fan of Rubbermaid, secondarily Target -- if J.C. Penney had success in cosmetics and private label apparel, Target likely did the same. Target's quarter was likely bolstered by its Lily Pulitzer launch.
- Brian Sozzi, '3 Things That J.C. Penney and Macy's Earnings Tell Us About the Economy' originally published 5/14/2015 on RealMoney.com.
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Separately, 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 unimpressive growth in net income, generally high debt management risk, poor profit margins and generally disappointing historical performance in the stock itself."
You can view the full analysis from the report here: JCP Ratings Report