They were too optimistic about Ron Johnson's transformation strategy, now they're too pessimistic about Ullman's turnaround prospects. I'm betting with Ullman's $1 million purchase on Nov 22, and the return of former customers now that sales and coupons are back. If JC Penney traffic can drop 14% in Oct Q 2012 vs previous year, it can come back 14% in the near term. The sales and coupons are back. The customers will be back. Margins will improve once they rid themselves of the Johnson-era inventory, and one year from now, it will be an entirely different picture. But you won't hear that from the analysts until it's obvious. Seen it before. It's happening again.
Personally, I think the analysts are much too optimistic about the prospects for Myron Ullman's attempt at turning around JC Penney. JCP had to buy its shoppers this Christmas and that accelerated the JCP cash burn situation. JC Penney will soon be closed and shuttered just like the former JC Penney outlets.
If JCP market cap returns to what it was in 2007, I calculate the stock should sell for $27.50. I took the market cap in 2007, subtracted all losses which have already occurred until now, subtracted all losses that are forecast to occur before the first anticipated profitable quarter (ending Jan 2016), and added the capital raise, to get $27.50. If there's another capital raise, it will reduce the calculated stock price by a couple dollars per share. If losses can be reduced below what analysts expect, it will raise the calculated price.
Unless there is a recession between now and then, $25 is the lowest price we should logically expect JCP to sell for during 2015.
If JCP market cap returns to what it was in 2007, I calculate the stock should sell for $27.50.
"IF"????? - - - I've asked this question many times with never a convincing answer - - - - What plans are in place or projected that would bring the market cap back to 2007 - - - for that to happen you would have to bring sales back to that level and drop 50% of your debt load - - - remember "Hype and Hope" is not a plan .
I have 21 well said...
Contrary to popular short belief, capital raise
Did not dilute at much as they had hoped...
And with the street throwing money at Jcp
And S, they are not about to let her go under
In 2014...the short int will buy into the next
Raise for sure if company is on better sales
See you at 11.00