J.C. Penney Co Inc (JCP.N) shares sank to a more than 30-year low on Monday after an analyst slashed her price target on its shares to $1 from $5, citing increasing concerns that the retailer "may engage in a financial restructuring in 2014."
"We do not comment on what is just one analyst's opinion" J.C. Penney spokeswoman Kristin Hays said, adding that the company expects to end the year with more than $2 billion in liquidity.
"When combined with the reported improvements in our business trends, the need for 'financial restructuring' is purely speculative and not grounded in fact, Hays said. Last week, she also denied a market rumor that the chain had hired bankruptcy counsel.
Imperial Capital analyst Mary Ross Gilbert cut her one-year price target on the stock from $5 to $1.
While various recent news reports about J.C. Penney "may be inaccurate or potentially misleading, (they) appear to be wearing down vendors and management, we believe," Gilbert wrote.
Gilbert cut her rating on Penney's shorter-dated bonds, those maturing from 2015 to 2018, to "sell" after previously having a "hold" rating on the 2015 bonds and a buy rating on those maturing in 2016-2018.
Shares of J.C. Penney ended the trading session down 8.3 percent at $6.42 on the New York Stock Exchange after falling as low as $6.27 earlier in the session. The shares traded as low as $6.25 in 1981, according to Thomson Reuters data.
After the market closed, J.C. Penney and Martha Stewart Living Omnimedia Inc (MSO.N) said that the retailer would no longer be represented on Martha Stewart's board under a revised commercial agreement covering their licensing and design partnership.
J.C. Penney has been struggling to revive sales after a failed experiment in 2012 to go upmarket alienated long-time shoppers and depleted its cash reserves. J.C. Penney incurred huge losses and spent large amounts of money on store remodels.
Earlier this month, the company closed a public offering of new shares that raised $785 million in a sale partly meant to reassure suppliers and their financiers that it had enough cash on hand.