Deutsche Bank Reiterates Buy Rating for J.C. Penney Company

After hosting JC Penney JCP CFO Bob Cavanaugh and SVP Jim Kenney, Deutsche Bank was optimistic on the company's stock outlook. JCP's management "described a broad based slowdown in consumer spending since Easter. This may reflect more appointment-based shopping, and Penney's BTS initiatives could be timed well to this." The analysts noted that JCP had some "self-inflicted issues in Home," but expect these to be much better in the second half of 2010. The management felt that these problems were now being addressed and expected "to see some benefits" soon. The management claimed that they can return to their "historic high operating margins of nearly %10." The analysts asserted that "all aspects of margin recovery are already in place," so all that is needed is for sales to ramp up. Deutsche Bank held to its $47 price target, based on 17 times their 2011 adjusted EPS estimate. With the stock trading at only $26.25 as of today's market close, the analysts see a lot of positive gains to be made.