Northcoast analyst Kara Szafraniec said J.C. Penney shares reacted severely to the Q2 gross margin disappointment, driven largely by the closing of 127 stores. The analyst believes the liquidation of the stores was the right move and management's commentary on the go-forward business was largely encouraging. J.C. Penny's growth categories continue to outpace the chain average and the company remains positioned to defend itself in the current weak apparel environment, Szafraniec wrote. He believes the gross margin pressures will abate in the second half and reiterates his Buy rating and $9 price target.