Analyst Downgrades: JCPenney, Abercrombie, and Guess?

Analysts downwardly revised their ratings on J C Penney Company Inc (JCP), Abercrombie & Fitch Co. (ANF), and Guess?, Inc. (GES)

by Karee Venema

Published on Feb 2, 2015 at 9:18 AM
Updated on Jul 2, 2020 at 1:14 PM

Analysts are weighing in today on retailers J C Penney Company Inc (NYSE:JCP), Abercrombie & Fitch Co. (NYSE:ANF), and Guess?, Inc. (NYSE:GES). Here's a quick roundup of today's bearish brokerage notes on JCP, ANF, and GES.

  • Evercore ISI initiated coverage of JCP with an uninspiring "sell" rating -- sending the shares lower in electronic trading. On the charts, the stock has had a strong start to the year -- due in part to a pair of well-received fundamental developments -- tacking on 12.2% to trade at $7.27. As such, JCP's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.10 ranks in the bullishly skewed 71st annual percentile. With more than 34% of J C Penney Company Inc's float sold short, though, some of this call buying may have been a result of shorts hedging against any additional upside.

  • Evercore ISI also weighed in on ANF, cutting its outlook on the shares to "sell" from "hold," and slashing its price target by $25 to $20. This negative analyst note isn't too surprising, considering the equity has surrendered more than a quarter of its value over the past 52 weeks, and hit a five-year low of $25.25 on Friday before settling at $25.52. This skepticism is shared elsewhere on the Street, as well, with Abercrombie & Fitch Co.'s 10-day ISE/CBOE/PHLX put/call volume ratio of 2.99 resting higher than 87% of similar readings taken in the past year. Additionally, more than 27% of ANF's float is sold short, and it would take more than eight sessions to cover, at average daily trading levels.

  • GES also received attention from Evercore ISI, with the brokerage firm downwardly revising its rating on the stock to "sell" from "hold." Similar to ANF, GES has put in a dismal performance over the past 52 weeks, down 33% to churn at $18.78. What's more, the shares bottomed out at a nearly six-year low of $18.58 on Friday. Should Guess?, Inc. continue to head south, another round of bearish brokerage notes could pressure the security lower. The equity's consensus 12-month price target of $21.50 stands at a more than 14% premium to GES' current perch, leaving the door wide open for price-target cuts.

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