With J.C. Penney Co. Inc. (NYSE: JCP) earnings scheduled to be reported Wednesday, analysts are gearing up for the first wave of retail companies’ reports. Sterne Agee CRT has made a call ahead of J.C. Penney’s report to give investors a better idea of what to expect. Although the rating is not overly positive or negative at Neutral, the firm does include its estimates for sales and earnings.

Sterne Agee CRT finds it difficult to get involved in J.C. Penney, with the stock seemingly blowing with the proverbial wind. This basically grounds shares to the fundamentals and implies an intrinsic value of roughly $8, considering the $1.2 billion 2017 fiscal year EBITDA bogey, but the company has traded in an extraordinary $6 to $11 range over the past year. At the same time J.C. Penney has seen a mixed bag of misses, beats and leadership changes.

As a result, Sterne Agee CRT is updating its comparable sales (comp) and earnings per share (EPS) estimates to reflect the company’s disclosure from mid-April. In the disclosure, J.C. Penney noted that same-store sales (SSS) were 6.0% quarter to date, compared to the same period last year, and first-quarter SSS are expected to be 3.5% to 4.5%. Accordingly, the firm now models first-quarter SSS of 4.0%, up from 2.0%, which is in line with guidance, and an EPS loss of $0.71, as well. For the full year, accounting for some notable progress on the top line, Sterne Agee CRT now sees comps of 4.2%, up from 3.3%, and an EPS loss of $1.56, up from $1.74.

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On the margin front, Sterne Agee CRT models 300 basis points of year-over-year gross profit margin expansion. The firm believes that improving trends continued into the first quarter were driven by more profitable clearance sales and higher private label penetration.

The first quarter is expected to fall within J.C. Penney’s full-year comp view of 3.0% to 5.0% compared to 2014. The second quarter is expected to be more difficult, compared to the 6.0% comp that it had in the same period last year.

Sterne Agee analysts Charles Grom, Renato Basanta and John Parke detailed in the report:

With valuation complex and JCPenney’s stock often disconnected from the earnings power of the business, we remain uninvolved. Similarly, playing the long-game on fundamentals means we are both skeptical that the company can reach its $1.2 billion FY17 EBITDA target, but also incrementally encouraged that recent sales trends are improving. Net, with no clear indication the turnaround is sustainable we keep our Neutral stance on JCPenney and prefer Buy-rated Kohl’s for “turnaround” exposure to the space.

On Monday morning, shares of J.C. Penney were up 2.2% to $8.69, in a 52-week trading range of $5.90 to $11.30. The stock has a consensus analyst price target of $8.39.

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