J.C. Penney’s (JCP) well-diversified supplier base, compelling merchandise, marketing campaigns, technological initiatives as well as effective cost and inventory management should drive sales and margin trends over the long term.
The company remains on track to deliver comparable-store sales growth and boost market share. The Sephora concept inspires confidence and is expected to be a significant revenue driver. Moreover, J.C. Penney’s healthy cash balance and significant free cash flow positions it to drive future growth and enhance shareholders return.
We have a long-term Outperform recommendation on the stock. Our target price of $35.00, or 21.5X 2010 EPS, reflects this view.Zacks Investment Research
