Piper Jaffray Comments On JC Penney's 'Good News' And 'Not So Good News'

In a report published Monday, Piper Jaffray analyst Neely J.N. Tamminga commented that a recent survey exploring women's shopping behavior and intentions showed that J C Penney Company Inc (NYSE: JCP) has improved its overall rank as a preferred shopping destination for fashion from number four this past fall to number three.

Tamminga noted both "good news" and "not-so-good news" were found in the survey.

The "good news" was that the percentage of women indicating that JC Penney is "no longer a brand/store" is weakening, marking a "positive sign of progress" as JC Penney strives to reclaim market share.

On the other hand, the "not-so-good news" was that only 78 percent of respondents who indicated they had shopped at JC Penney in the past six months intend to purchase from the store again in the next three months. The analyst stated that while this figure is high, the repurchase intention is lower than the 87 percent indicated in a similar survey six months ago.

Estimate Changes

Tamminga lowered her comp estimates to +1 percent from a previous 4 percent for the first quarter, citing continued weather hassles, a broader pause among consumers to spend at the mall and overall lower traffic trends to malls.

However, the analyst stated that the next three weeks of sales could be "significant" and possibly a "game changer" as temperatures begin to warm and shoppers think about spring trends.

Shares remain Overweight rated with a price target lowered to $13 from a previous $14.