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Is J. C. Penney (JCP) Stock Worth Adding to Your Portfolio?

J. C. Penney Company, Inc.JCP recently announced its plan to considerably decrease its $56 billion pension obligation by 25-35%. J. C. Penney has signed a deal with The Prudential Insurance Company of America ("Prudential") to hand over a part of its obligations and assets to the latter.

The company will buy a group annuity contract which will settle a large portion of its remaining retiree pension responsibilities. The transfer would leave the rest of the pension plan overfunded. The annuity transaction will be closed in December.

Simultaneously, this Zacks Rank #2 (Buy) company continues to work on improving its omni-channel reach. As online shoppers shop more than brick and mortar customers, improving their shopping experience is the key to building a strong web portal.

In the second quarter, the company's digital sales improved sequentially on the back of expanded assortment, as well as strong inventory levels. To drive more traffic online, the company will be launching a buy online, pick-up-in-store same day facility in several markets by early 2016. The facility will be extended to the entire store network.

Management remains confident that these strategic endeavors, which include deeper penetration of private brands, focus on omni-channel capabilities and expansion of Sephora stores will continue to fuel a strong turnaround. As a result, J. C. Penney upgraded its fiscal 2015 EBITDA guidance to $620 million and stated that it is on track to achieve its long-term EBITDA goal of $1.2 billion.

Other Favorably Ranked Stocks

Other stocks in the retail sector that are worth considering include Big Lots Inc. BIG , Burlington Stores, Inc. BURL and Target Corp. TGT . All these stocks hold a Zacks Rank #2.

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PENNEY (JC) INC (JCP): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

BIG LOTS INC (BIG): Free Stock Analysis Report

BURLINGTON STRS (BURL): Free Stock Analysis Report

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


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

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