J. C. Penney (NYSE:JCP) opened today at $83.44. So far, the stock has hit a low of $83.12 and a high of $83.76. As of 9:56 this morning, JCP was trading at $83.57, up $0.23 (0.28%) on moderate volume.
The company announced a new ad campaign they call "Every Day Matters" yesterday. This is part of an effort to raise the image of the store, which many consumers associate with older, less affluent buyers. The plan is to appeal to more "aspirational" consumers who are younger and have higher incomes.
After hitting a one year low of $55.51on February 13, 2006 the stock hit a high of $85.68 on February 7, 2007. S&P lowered the stock from a 3 STAR (out of 5) hold rating to a 2 STAR sell rating with a 12-month price target of $77. S&P stated "Lower sales and margin growth assumptions" as the reasons for the downgrade. The technicals for JCP have been generally positive but on the decline lately.
For a bearish hedged play on J.C. Penney, I would consider a March bear-call credit spread above the $90 level. Be careful with this one though since the company is scheduled to report earnings February 22.
Vic Schiller is an analyst on the move at Investors Observer (Free Subscription). DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.
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