S&P Opinion:
After recent visits to the stores, we think
that Penney’s management may be overly
pessimistic in their outlook for consumer
spending. We think shoppers are
responding favorably to the more aggressive
promotional strategy, ongoing efforts
to deliver faster-turning assortments, and
better merchandise quality, which we see
strengthening the competitive position of
the brand. We reiterated our fiscal 2009
(ending January) earnings estimate of
$3.70 a share, which factors in higher
markdowns, but we raised our 12-month
target price by $10 to $50 on revised historical
P/E valuation.
Sentiment: Buy
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$63.65 (08/16/07)
