Business World

An analyst upgraded J.C. Penney Co. Monday, saying the retailer’s valuation and recent sales improvement make shares a good investment.

Deutsche Bank analyst Bill Dreher Jr. boosted his rating to "Buy" from "Hold" and his price target to $46 from $45. The new target implies he expects the stock to rise 25% over Friday’s $36.88 close.

Sales appear to have improved at the Plano, Texas-based company recently, though it’s not clear if this is due to seasonally warmer temperatures or the federal stimulus program, Dreher said.

So far this year, the stock has dipped about 16%, compared with a 10% drop in the S&P 500.

"We recommend purchase of J.C fast cash online. Penney shares as a value story, with a compelling risk/reward profile," he said in a note to clients.

Dreher boosted his fiscal 2008 earnings estimate to $3.33 from $3.32 per share. Analysts polled by Thomson Financial expect, on average, earnings of $3.28 per share for the year.

A representative for J.C. Penney (JCP, Fortune 500) was not immediately available for comment. 

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