JC Penney hit with multiple downgrades
Could Ron Johnson be the next CEO to be fired after the retailer's dismal performance?
The bad news just keeps on coming for JC Penney (JCP).
On Feb. 15, Benzinga reported on Gilford Securities' downgrade of the Plano, Texas-based firm. Then, after finishing far below expectations on the earnings front, JC Penney's stock plunged 17% to close out February.
Now, a day after Benzinga reported Vornado sold nearly half of its stake in the lumbering department store chain, JC Penney woke up to two more downgrades.
Oppenheimer has downgraded the company from "outperform" to "perform."
The ratings agency states, "We continue to believe that behind a lot of noise the components of a potentially meaningful strategic shift are taking shape. Near-term risks for JCP are, however, building and could potentially disrupt or even derail the company's recovery."
Accordingly, Oppenheimer has reduced its price target from $30 to $15.
Citi has also decided to take a jab at JC Penney, downgrading the company to "neutral." On this note, Citi analyst Deborah Weinswig states, "We came away from our Headquarter visit with the company's CEO, CFO, and COO more concerned that JCP's return to topline growth will take longer than expected. We continue to be supporters of the company's long-term vision, including its shop strategy and new brand launches. However, we are less convinced that the course-correcting strategies being implemented around pricing and marketing will drive meaningful sales improvement."
With this in mind, Citi has reduced its price target from $22 to $15.
Hasta la vista, Ronnie?
The Wall Street Journal reports JC Penney is considering selling the company or terminating CEO Ron Johnson if the sales decline doesn't reverse in 2013.
According to the report, the company's board of directors will closely evaluate sales and merchandising results over the next six months. The board hopes the opening of Joe Fresh stores, a makeover to the company's home department and the re-introduction of regular discounts will help get results, as notes the Wall Street Journal.
However, if all else fails, the mentioned sale or termination of Johnson could become a reality.
Penney plunges again
With the one-two downgrade combo from Citi and Oppenheimer, JC Penney is stumbling in the market yet again.
After reaching a four-year low and ultimately closing down nearly 11% Tuesday, JC Penney was trading below $14.50 for the first time since March of 2009. The stock declined over 3% in the morning hours on Wednesday, but pared some losses by the afternoon.
More from Benzinga
How unfortunate that this great old company is being destroyed. I, too, used to buy almost everything from Penny's; now I don't because they are no longer offering the prodicts I want. I have a very generous gift certificate that I can't even manage to spend part of. I don't care about the trendy brands; I want the dependable products that I have counted on for years. And the cute little monthly "catalogues"- cuteness is all tehy ahve going for them. What a waste of money.
1) JC Penny's should change its name to Jay Z Penny's to bring the urban youth in.
2) Stock entire store with Nike's selling for $100 - $200 a pair, made in China for about 6 bucks.
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Bill Stiritz has experienced an estimated $145 million in paper losses on his investment in the company.
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