NEW YORK (TheStreet) -- Shares of J.C. Penney Co. Inc. are down 1.98% to $7.44 in morning trading on Monday after the company's price target was lowered and its "hold" rating reiterated at Deutsche Bank. The firm lowered the price target for the department store company to $8 from $10, and said new developments since analyst day include reduced optimism for top-line results, long term margin pressure, and expectations for a beneficial creative financing plan. "With the low hanging fruit now behind us, JCP's private label led assortment will lead to market share losses similar to what was experienced in 2011 combining with an expense structure and debt levels that remain too high, limiting a return to profitability," Deutsche Bank analyst Paul Trussell said. Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Separately, TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate PENNEY (J C) CO (JCP) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures." Highlights from the analysis by TheStreet Ratings Team goes as follows: The debt-to-equity ratio is very high at 2.09 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Multiline Retail industry and the overall market, PENNEY (J C) CO's return on equity significantly trails that of both the industry average and the S&P 500. PENNEY (J C) CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PENNEY (J C) CO reported poor results of -$6.07 versus -$4.49 in the prior year. This year, the market expects an improvement in earnings (-$2.56 versus -$6.07). 36.01% is the gross profit margin for PENNEY (J C) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.14% trails the industry average. Net operating cash flow has significantly increased by 119.35% to $137.00 million when compared to the same quarter last year. In addition, PENNEY (J C) CO has also vastly surpassed the industry average cash flow growth rate of -2.43%. You can view the full analysis from the report here: JCP Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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