Wells Fargo: J.C. Penney Successor 'Not A Proven Apparel CEO'

J.C. Penney JCP announced on Monday that Marvin Ellison, a top ranked executive with Home Depot HD will replace Mike Ullman as J.C. Penney's new CEO. Brian Sozzi of Belus Capital Advisors noted that the appointment was a positive for J.C. Penney. In an e-mail to clients on Monday, Sozzi stated that Ellison's “operational background is needed.” On Tuesday, Paul Lejuez of Wells Fargo offered an opposing view. Related: Sozzi: 'Say Hello To The New CEO Of Your Mom's J.C. Penney' “Mr. Ellison has a herculean task ahead of him, and we are not sure if his expertise will be enough to turnaround J.C. Penney,” Lejuez wrote while reiterated an Underperform rating and $5 to $6 price target. According to Lejeuz, Ellison is an operational and logistics expert and oversaw vast expansions and sales increases at Home Depot. The analyst notes that Ellison brings “a good amount of operational expertise to the table” but such skills “is not what J.C. Penney needs.” Lejeuz adds that J.C. Penney's sales of apparel and accessories are “faring worse” and “it does not seem Ellison has expertise in these areas.” Bottom line, “a background in store logistics and operations does not immediately show us how he can add value in jewelry, handbags, and internet sales.”