J.C. Penney Shares Rise on Analyst Report About Prospect of Stores Closing

(The Dallas Morning News/MCT) -

J.C. Penney shares closed up nearly 5 percent on Monday, after a new analyst report presented scenarios for stores closing.

J.P. Morgan analyst Matthew Ross put a pencil to the prospect that Penney close 100, 150, 200 or 300 stores.

He says that since Penney’s costs are now too high, one way to reduce costs is to close stores. He even equates store closures to future stock-price gains. For every 100 stores, Boss puts $3 on the stock price. That’s based on his calculations for the impact of lower costs on Penney’s profitability.

Penney, which is trying to increase sales to a level that would make it profitable again, hasn’t responded to the report.

Boss gives Penney stock a neutral rating, but raised his price target this month to $11 from $9.50 a share.

On Monday, the stock closed up 4.9 percent, or 50 cents, to $10.69.

In the past, analysts have brought up the store-closing idea and Penney has said it wasn’t planning major store closures.

The company closed 33 stores this year, and is opening one in Brooklyn, N.Y., on Friday.

Penney will hold an analyst meeting in New York in October.