When it seemed as though CEO Mike Ullman wasn’t doing a good enough job at J. C. Penney Company, Inc. (JCP), he was replaced by Ron Johnson. This didn’t go as planned and led the company into the abyss. Some feel that Johnson wasn’t given enough time, but there wasn’t much time left considering the lack of revenue and devastating losses. The solution? Rehire Ullman.

Back To Ullman

Ullman had a big mess to clean up, and despite the stock losing 41% since his return in 2013, he at least helped slow the downward momentum of the company’s fiscal performance and the stock's free fall. He also didn’t hesitate to blame the company’s struggles and losses on Johnson’s strategy, which led to J.C. Penney losing its once-loyal customers. (For more, see: 5 Things J.C. Penney Wants You to Know.)

Ullman to Ellison

However, Ullman is now giving way to Marvin Ellison, who began his career by making $4.35 an hour working at Target Corp. (TGT). He eventually made his way to vice president of U.S. stores at Home Depot Inc. (HD). Ellison’s strengths are in operations and logistics. His potential weakness is in a lack of merchandising experience, especially in soft goods. But it’s a quote he gave that really might hint at the retailer’s near-future strategy. He stated: “Change for the sake of change is overrated.” This likely means that you’re not going to see many big risks taken by J.C. Penney in the near future. It’s going to be more of a “stabilize, then grow” approach with plenty of cost cutting along the way.

J.C. Penney has been improving its e-commerce business and this year it introduces same-day buy online/pick-up in store in 12-15 markets. The added bonus here is that 20% of J.C. Penney customers end up buying other merchandise in the store when picking up items that were ordered online. In 2016, J.C. Penney plans to offer same-day delivery as well. (For more, see: 4 New Insights from Top J.C. Penney Executives.)

Despite Headwinds

The biggest headwinds for J.C. Penney are a hesitant consumer, a promotional retail environment, fierce competition and most of all, the perception that J.C. Penney is an antiquated brand. To that last point, changing that perception while not losing loyal customers will be a big challenge.

Despite these headwinds, J.C. Penney has some high expectations for 2015 and beyond. In 2015, it expects comps to grow between 4% and 5% versus a prior expectation of 3%-5%, and selling, general and administrative expenses to decrease by $100 million versus a prior expectation of a decrease of $50 million-$100 million. By 2017, J.C. Penney expects $1.2 billion in EBITDA. (For more, see: 3 Lessons J.C. Penney Has Learned.)

These are some lofty expectations given current headwinds, but they’re not unachievable. This is a company that once had $32.2 billion in annual revenue (2003). In its most recent fiscal year, it generated $12.2 billion in revenue. And the stock is down approximately 90% from its all-time high. Will it get back to those revenue numbers and recoup all of those stock losses? No. But if it continues to slowly crawl its way back in the real world by attracting Middle America again, then the stock could see some appreciation. The dilemma is the external factor of deflation, which would lead to a broad bear market.

JCP has depreciated 10.02% over the past year and the company still has to contend with consistent losses and a debt-to-equity ratio of 3.05. (For more, see: Will J.C. Penney Ever Recover?)

The Bottom Line

Putting all factors together, it looks as though J.C. Penney’s stock will be volatile in the near future. While most company/stock situations are obvious if you look at them from a logical perspective, J.C. Penney is complicated. It isn’t outside the realm of possibility that J.C. Penney swings back to profitability at some point in the future. If I were forced to make this call I would be 60% bearish, but those odds aren’t even close to high enough to lay any money down. Much better opportunities exist. (For more, see: Will J.C. Penney Ever Make Money Again?)

Dan Moskowitz does not have any positions in JCP.