Ron Johnson is not having a good time at trying turn around JCPenney Co. Inc. (NYSE: JCP). Nothing seems to be working here. Now we have Credit Suisse taking an already cautious Neutral rating down to a Sell rating. It gets worse than that as well. Credit Suisse cut the price target for the troubled retailer from $25 to $15.
Michael Exstein of Credit Suisse has thrown in the towel on Ron Johnson. He has voiced mounting concerns that the viability of Johnson’s strategy is questionable, and this is after a report just last week said that the coming holiday season will test the “new” business model at the stores as competitors are responding to its efforts.
Our concerns that JCP would not be able to stabilize its business in a timely fashion was mounting, especially after seeing how effective the completion had been in responding to JCP’s initiatives. Since reporting a worst case scenario third quarter, those concerns have only escalated, and we downgrade to underperform and lower our target price to $15.”
JCPenney shareholders can expect another drop of about 27% to come, if Credit Suisse’s opinion is correct, based upon the $20.64 closing price. Apparently this voice is being believed, as the stock is down about 3.5% at $19.90, against a 52-week trading range of $19.06 to $43.18.
JON C. OGG