Piper Jaffray Reports On JCP At Its Consumer Conference

Piper Jaffray is reiterating its Neutral rating and its $37 price target on J.C. Penney Co. JCP after speaking to JCP's EVP of Product Design and Sourcing Ken Mangone at the 31st Annual Piper Jaffray Consumer Conference. According to Piper Jaffray, “An experienced sourcing team helps navigate the current sourcing environment. The company credits its vertically integrated sourcing structure with controlling costs and believes it is able to save costs relative to competitors who use sourcing agents. Management noted the average tenure of members of the sourcing team is 11 years and average tenure of the buying team is 17 years. The outlook for sourcing is beginning to improve as industrywide unit order declines are reducing demand for capacity and raw materials. Management highlighted an example of cotton spinners caught with too much yarn when retailers reduced y/y unit orders. While still early, this excess inventory and lower unit demand could provide some relief on costs.” JCP closed yesterday at $31.64.