J.C Penney Gets Its Mojo Back

Though it's been almost 2 years since J.C Penney JCP outperformed both Macy's M and Kohl's KSS on a monthly comp print, but J.P. Morgan believes that's likely to transpire when comps are reported next week. The company is beginning to see a sales benefit from a number of initiatives, including: the exclusive launch of Liz Claiborne, a refocused promotional messaging, and reorganization of its home segment. J.P. Morgan expects JCPenney to report a +5% comp for September, which is ahead of current expectations for both KSS/M at +3%. The new Liz Claiborne brand is seen as the #1 potential driver, which is exclusive to J.C Penney. The company has been able to nearly clear out all transitional merchandise in the former Liz & Co. and CONCEPTS by Claiborne brands and is selling a substantial amount of the new merchandise at the first markdown rate of 25%. Risks to the price target include poor launch execution or customer reluctance to purchase new private-label/exclusive brands, future challenges from today's uncertain macro backdrop, and negative ramifications from a more promotional competitor at Macy's or Kohl's. J.C Penney closed Wednesday at $27. The stock is up more than 2% in premarket trading