A shortfall in projected sales growth for J.C. Penney Co. could help drive the stock down 35 percent, according to the Nov. 10 edition of Barron's, which notes the company's chances of reaching its long-term financial goals look slim.
J.C. Penney, which is expected to report its third-quarter results on Wednesday, had set a goal of $1.2 billion in Ebitda, or earnings before interest, taxes, depreciation and amortization, by 2017, at its analyst day in October.
But a sales bounce in the first half of the year "appears to be fading," Barron's said, noting that falling short could present a cash problem for the retailer, whose "high debt reduces both operating flexibility and takeover appeal," the article said.
J.C. Penney in October cut its third-quarter same-store sales forecast, citing lower sales in September and a "difficult retail environment." The department store said it expected low-single-digit percentage growth in same-store sales in the three months ended in October, after earlier forecasting mid-single-digit growth.
J.C. Penney shares closed at $7.82 on the New York Stock Exchange on Friday.
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