J.P. Morgan Reiterates Neutral Rating on JCPenney (JCP)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on JCPenney JCP; it has a $32.00 price target on the stock. The JPM analysts said that their recent channel checks suggest that sales at JCPenney are on plan. They believe much of the strength this holiday season is being driven by the excess inventory levels at the end of 3Q, when inventory was up 6.2% vs. sales growth of only 0.2%. Encouragingly, though, store managers seem to be confident in the company's current level of inventory, suggesting they are on plan to end 4Q with inventories aligned to sales. Moreover, traffic trends have also remained strong, gaining traction through the month as Christmas approaches. The analysts noted that JCP's sales are not benefiting on the back of margins, which is a good sign.