JCPenney stock plummeted nearly 8% Monday morning after a UBS note sent out to clients noted the company has a “tough path forward.”
The report comes on the heels of JCPenney’s lacklustre first quarter earnings report released Friday morning.
The department store reported that same-store sales fell 3.5% versus a year ago. Earnings per share slumped $US0.26 from last year.
The weak Q1 results have some Wall Streeters concerned that the retailer may not have the wherewithal to fend off the ongoing retail Apocalypse.
“After a big 1Q SSS shortfall (-3.5% vs our -0.5%), JCP needs 2-yr SSS to accelerate by +3.7-6.3pp in 2Q-4Q to hit its guide for -1% to +1% SSS for the year,” wrote the UBS team led by Michael Binetti.
The bank has lowered its price target for JCPenney to $US4 per share, below its original 12-month price target of $US5. Currently, the stock trades at $US4.31 per share.
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