J.C. Penney’s stock price could double over the next three years, according to Dallas-based Hodges Capital portfolio manager Christopher Terry.
“The turnaround potential is promising,” said Terry, who was quoted over the weekend in Barron’s.
Hodges has held Penney stock for more than a year, but recently added Penney shares as the Plano-based retailer’s CEO Marvin Ellison cut costs while stores and online posted higher sales. It’s not easy doing both at the same time.
“Marvin is the real deal and 100 percent focused on creating shareholder value,” Terry said in the Barron’s article.
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Fourth-quarter results, he said, suggest that Penney is taking market share back from its department store rivals.
Three to five years from now, when the turnaround is complete, Penney could be earning $2 a share, Terry said. That’s how he gets to $20 from the current price. That assumes a price-to-earnings ratio of 10 for department stores.
Date: May 2, 2016