Myron “Mike” Ullman 3rd found a new believer in the turnaround he’s leading as chief executive officer of J.C. Penney Co. Inc.
Bernard Sosnick, retail analyst at Gilford Securities, upgraded the beleaguered retailer’s stock to “buy” from “neutral” today on the belief that the company is “at an inflection point, moving from danger to a more secure foundation to build upon.”
The upgrade helped push shares of Penney’s up 1.8 percent to $15.54 as the S&P 500 Retailing Industry Group gained 0.3 percent, or 2.29 points, to 737.23, and the Dow Jones Industrial Average rose 0.1 percent, or 19.66 points, to 14,567.17.
Ullman recently drew down $850 million from its credit facility and is working believed to be trying to secure more funds to help get the chain back on track. Sosnick said Ullman wouldn’t have gone to Penney’s and replace Ron Johnson as ceo without some assurance that the retailer would be able to get the financing it needs.
The analyst noted that Penney had already modulated its approach to sales, which could give Ullman some additional breathing room.
“I believe that there were plans put into place for more aggressive sales efforts — Memorial Day, Independence Day, Labor Day — and that a timeline of favorable events and comparison is pretty much built in,” said Sosnick, noting Ullman could ride through the first months of his tenure and plan for Christmas.
Among the other fashion stocks gaining ground Monday were Lululemon Athletica Inc., which gained 8.1 percent to $73.89 despite no obvious developments at the company; G-III Apparel Group, 3.5 percent to $38.64; VF Corp., 2.3 percent to $173; Tiffany & Co., 1.4percent to $71.06, and Amazon.com Inc., 1.2 percent to $263.55.
In Europe, markets closed with mixed results. The FTSE 100 in London was down 0.1 percent to 6,280.62, while the CAC 40 in Paris was flat at 3,652.13. Frankfurt’s DAX was slightly ahead by 0.2 percent to 7,478.11, while the FTSE MIB expanded 1.7 percent to 16,021 at Italian President Giorgio Napolitano was re-elected.
The gainers included Hermès International and Mulberry, both up 1.1 percent, to 251.55 euros and 9.05 pounds, respectively. Losing ground were Safilo, down 2 percent to 10.50 euros; Burberry, 1.5 percent to 12.79 pounds; and The Swatch Group, 1.7 percent to 88.50 Swiss francs.
The pound traded at $1.51 against the dollar, while the euro was worth $1.31 and the Swiss franc sold for $1.07.