UPDATE 1-Citi, Oppenheimer cut ratings on J.C. Penney stock
(Adds comments from former CEO calling for board action)
March 6 (Reuters) - Two more analysts downgraded ratings on J.C. Penney Co Inc's stock amid growing uncertainty around the department store chain's turnaround, leaving its shares with only one "buy" rating out of 20 Wall Street investors covering the retailer.
The company's shares were down 3 percent at $14.51 in afternoon trading - hitting a new 52-week low. They have slid 32 percent since Penney reported disastrous holiday quarter results last week.
The downgrades by Citigroup and Oppenheimer & Co leave only one analyst, Christopher Graja of Argus Research Corp, with a buy rating. In contrast, there are eight sell ratings, according to Thomson Reuters data.
Citigroup's Deborah Weinswig, who now has the equivalent of a hold rating on Penney instead of a buy, wrote in a research note that following a meeting with Penney executives at its Plano, Texas headquarters, including Chief Executive Ron Johnson, she believes it will take more time for Penney's revenue to return to growth than she initially expected.
Oppenheimer's Brian Nagel also cut his rating.
Penney's strategy, which is centered on turning many of its stores in collections of "shops within a shop" showcasing trending clothes and home goods, also included eliminating coupons and sales to disastrous effect, with sales declining 25 percent in the first year of Johnson's turnaround plan, and Penney burning through nearly $1 billion in cash.
Allen Questrom, a respected retail industry veteran who was Penney's CEO from 2000 to 2004, called for Johnson's ouster on Wednesday. Speaking on CNBC, Questrom called Johnson "delusional" and said the board had to take immediate action.
"This has been going on long enough," Questrom said.
A source familiar with the board's thinking told Reuters this week that the board will give Johnson until the end of the year to stem Penney's sales decline.
Penney is bringing back many sales events and coupons as it tries to bring more customers back into its stores.
"We are not convinced that the changes being made to JCP's pricing and promotions will drive the expected improvement in traffic and sales," Citi's Weinswig wrote.
Penney is also set to open about 20 more boutiques, including Joe Fresh clothing and Jonathan Alder home goods, this spring.
Weinswig said that the potential for asset sales, a private takeoever and senior executive changes limit how much further shares can slide. She also said that Macy's Inc and Target Corp have been the biggest beneficiaries of Penney's troubles.
(Reporting by Phil Wahba in New York; Editing by David Gregorio; Editing by Bernard Orr)