Shares of J.C. Penney (JCP) tumbled another 7% on Friday after UBS (UBS) slapped a “sell” rating on the slumping department store operator and called for “significant changes” to its turnaround strategy.

The downgrade comes as new J.C. Penney CEO and former Apple (AAPL) exec Ron Johnson struggles to stem bleeding same-store sales, which are projected to plunge almost 30% in the fourth quarter.

UBS slashed its price target on J.C. Penney to $13 from $21 on Friday and lowered its rating to “sell” from “neutral.”

“We believe a deteriorating earnings outlook and emerging signs of cash flow distress will require significant changes to JCP’s turnaround strategy,” UBS analyst Michael Binetti wrote in a note to clients.

Binetti said any “credible” turnaround plan will require a “significant cut to mid-term EPS power” due to increased incentives and signs that “current cash flows will not be sufficient to support the new shop rollout timetable.”

The rising concerns about J.C. Penney prompted UBS to slash its fourth-quarter forecast on the company, now projecting same-store sales to plummet 28%, compared with 20% previously. Gross margins are now seen falling to 30% from 33% earlier and the Street’s view of 31.5%.

Binetti said a revision to in-store promotions last quarter suggests that same-store sales “trends are below plan, but also implies that the earnings-damaging mix shift away from high-margin Everyday Value merchandise in 3Q accelerated further in 4Q.”

UBS said it believes the rest of Wall Street will soon sour on J.C. Penney as well, due in part to the company’s shift back toward a traditional department store business model that is highlighted by deep discounts.

Investors were spooked by the UBS downgrade, driving shares of Plano, Texas-based J.C. Penney down 7.57% to $17.70 Friday morning. The selloff leaves the stock down about 50% over the past 12 months. 

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