NEW YORK (MarketWatch) -- J.C. Penney Co. slumped 5.4% to $18.11 on Friday after
UBS cut its rating on the struggling department store chain to sell from neutral. Analyst Michael Binetti also lowered his price target on the stock to $13 from $21 a share and cut his fourth-quarter same-store sales estimate to a decline of 28% from a prior estimate of a 20% drop. He reduced his gross margin expectations as well. "We believe a deteriorating earnings outlook and emerging signs of cash flow distress will require significant changes to JCP's turnaround strategy," he said. He added "any credible revised plan will require a significant cut to mid-term" per-share profit partly because the company will have to install deeper price discounts. There's also "mounting evidence" that current cash flows will not be sufficient to support thenew shop rollout timetable while the company also has to increase expenses to " re-engage customers," he said. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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