Piper Jaffray Reiterates Neutral, Lowers PT on J.C. Penney (JCP)

Piper Jaffray is out with a research report this morning, where it reiterates its Neutral rating on J.C. Penney Company JCP; it has a $22.00 price target on the stock, down from $28.00. The PJ analysts cited the company’s recent earnings report, which was at the lower end of the company’s revised guidance. The miss was largely due to a lack of clearance merchandise in the final weeks of July as well as a more challenging consumer environment than initially anticipated. The analysts also noted that gross margins are now forecasted to decline in the second half of 2010; PJ is seeing them down 10 basis points in Q3 and 50 basis points in Q4. As for valuation, the analysts remarked, “While the stock does look inexpensive on an adjusted earnings basis of FY12E EPS of $2.20/shr and dividend yield of 4%, we believe a 10x multiple is appropriate in the current environment given the lack of square footage growth and slower comp trend than its closest competitors.”