J.C. Penney shares jump 10 percent on upgrade, short interest falls
(Reuters) - J.C. Penney Co Inc (JCP.N: Quote) shares rose as much as 10.8 percent on Friday after Wall Street firm ITG Investment Research lifted its sales forecast for the department store chain, citing "improving sales trends" in five of the last seven weeks.
Penney shares were up 8.7 percent at $8.15 in afternoon trading and rose as high as $8.31. They hit a 32-year low of $6.24 last week.
ITG analyst John Tomlinson said in a research note that he now expects comparable sales to be down 4 percent for the third, rather than down 6 percent in his previous projection.
Earlier this week, Penney Chief Executive Myron Ullman re-iterated his expectation, given two weeks earlier, that same-store sales would turn "positive" coming out of the third quarter and into the holiday season quarter, easing concerns about the store's prospects and sending shares higher.
The company previously reported declines for August and September.
Last year sales fell 25 percent after the company eliminated coupons and discounts in a failed bid to move upmarket. Business continued to fall in the first two quarters of the current fiscal year which began in February, raising concerns about liquidity and market loss share.
Penney's shares have also risen as investors are becoming less bearish about the company. The percentage of Penney shares outstanding sold by investors betting on a decline, or short interest, fell to 25 percent as of October 15 from 35 percent two weeks earlier, according to Thomson Reuters data.
(Reporting by Phil Wahba in New York; Editing by Richard Chang)
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