The Chaikin Power Gauge RatingTM for J.C. Penney Company, Inc. JCP is bearish due to very poor financial metrics, weak earnings performance and bearish price/volume activity. The rating also reflects positive expert opinions. JCP’s financial metrics are very poor due to a high long-term debt to equity ratio relative to its industry group and low return on equity.
Financial Metrics Rating – Very Bearish
JCP’s financial metrics are very poor. The company is carrying too much long-term debt relative to its industry group and yields a relatively low return on shareholder’s equity. The rank is based on a high long-term debt to equity ratio relative to its industry group, low return on equity and relatively low cash flow.
Earnings Performance Rating – Bearish
JCP’s earnings performance has been weak. The company has not met analysts’ earnings estimates and has an erratic 5 year earnings trend. The rank is based on worse than expected earnings in recent quarters, a relatively low projected P/E ratio and inconsistent earnings over the past 5 years.
Price/Volume Activity Rating – Bearish
Price and volume activity for JCP is bearish. JCP has a declining price trend and is trading on lower volume than its 90 day average volume. The rank for JCP is based on a negative Chaikin price trend, a positive Chaikin price trend ROC and a decreasing volume trend.
Expert Opinions – Bullish
Expert opinions about JCP are positive. Analysts are raising their EPS estimates for JCP and insiders are net buyers of JCP’s stock. The rank for JCP is based on analysts revising earnings estimates upward, a high short interest ratio, insiders purchasing stock, optimistic analyst opinions and relative weakness of the stock versus the Nonfood Retail-Wholesale industry group.
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