Sector Update: Consumer

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Consumer stocks were moderately higher with shares of consumer staples companies in the S&P 500 rising about 0.4%. Shares of consumer discretionary firms in the S&P 500 were ahead about 0.3%.

In company news, shares of J.C. Penney Company Inc. ( JCP ) rose Monday after a J.P Morgan analyst in a new research note gave high marks to management at the department-store retailer's decision to close many of its under-performing locations.

According to JPMorgan analyst Matthew Boss, the stock "sets up well" for investors to own through year's end, believing a "large scale" restructuring of the company - including more than 100 store closings - likely in early 2015.

By Boss' reckoning, each 100 stores JCP decides to close would add around $3 in equity value for the stock, with the JPMorgan analyst reiterating his $11 price target. Year-to-date, the stock is up about 11%, outpacing a 7.6% gain for the S&P 500.

JCP's "story stands at a pivotal crossroads," he wrote, "with today's mid-single-digit top-line pace of recovery questioned versus the 33% revenue drop the past three years."

Boss also views the company's upcoming analyst day in October as a positive catalyst.

JCP shares were up nearly 5% this afternoon at $10.68 apiece, just off its session high of $10.76 a share. Over the past 12 months, the stock has traded within a range of $4.90 to $14.65 a share, dropping about 20.5% over that span.

In other sector news,

(+) THI, (+21.4%) Burger King ( BKW ) confirms discussions about a potential strategic transaction, also lifting BKW almost 22% higher.

(-) GEF, (-5.8%) Lowers FY14 EPS outlook to $1.98 to $2.08 from its prior guidance expecting earnings this year in a range of $2.48 to $2.80 per share. Street is at $2.81.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: JCP , BKW

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