GAP (GPS) – Research Analysts’ Recent Ratings Changes

Several analysts have recently updated their ratings and price targets for GAP (NYSE: GPS):

  • 9/12/2018 – GAP was downgraded by analysts at ValuEngine from a “hold” rating to a “sell” rating.
  • 8/27/2018 – GAP was upgraded by analysts at Citigroup Inc from a “sell” rating to a “neutral” rating. They now have a $28.00 price target on the stock. They noted that the move was a valuation call. They noted that the move was a valuation call.
  • 8/25/2018 – GAP was given a new $39.00 price target on by analysts at Barclays PLC. They now have a “buy” rating on the stock.
  • 8/24/2018 – GAP had its price target lowered by analysts at JPMorgan Chase & Co. from $32.00 to $30.00. They now have a “neutral” rating on the stock.
  • 8/24/2018 – GAP had its price target lowered by analysts at B. Riley from $35.00 to $33.00. They now have a “neutral” rating on the stock.
  • 8/24/2018 – GAP had its “hold” rating reaffirmed by analysts at Guggenheim. They wrote, “We’re encouraged by Gap’s continued push into Value (Old Navy) and Active (Athleta). Despite this, we remain NEUTRAL due to Gap brand results remaining soft, GPS beginning to cycle difficult compares in 2H18, and the company’s significant mall exposure. Net sales increased 8% to $4.1bn (excluding the $139mn relating to the adoption of the new revenue recognition standard, net sales increased 4%) including a +2% comp (+3% two-year stacked; flat QoQ). We are encouraged by the seventh straight quarter of positive comps, driven by a positive result at the continuation of positive comps at Banana Republic. Athleta also continues to perform well, with bottoms (~50% of the assortment) driving a +HT% comp in the quarter. Digital momentum continued, and the company remains on track to generate ~$3.5bn in online sales in FY18.””
  • 8/21/2018 – GAP was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Gap has outperformed the industry in the past month. Notably, its growth strategy focused on growing the Old Navy and Athleta brands looks promising. Moreover, the company’s efforts to boost digital and mobile offerings, alongside improving product acceptance bode well. The company has an impressive surprise history as it delivered earnings beat in four of the last five quarters. Also, it marked sixth straight positive sales surprise in first-quarter fiscal 2018. Further, comps improved for the sixth straight quarter due to continued strength at Old Navy and growth at Banana Republic. However, the company is witnessing softness across its namesake brand due to operational issues related to timing of inventory, breadth of the product assortment and shortage of gaps in certain categories. These factors are likely to continue hurting the brand’s comps in the fiscal second quarter.”
  • 8/10/2018 – GAP is now covered by analysts at Wedbush. They set a “neutral” rating and a $32.00 price target on the stock.
  • 7/31/2018 – GAP was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $33.00 price target on the stock. According to Zacks, “Gap has outperformed the industry in the past year. Notably, its growth strategy focused on growing the Old Navy and Athleta brands looks promising. Moreover, the company’s efforts to boost digital and mobile offerings, alongside improving product acceptance bode well. The company has an impressive surprise history as it delivered earnings beat in four of the last five quarters. Also, it marked sixth straight positive sales surprise in first-quarter fiscal 2018. Further, comps improved for the sixth straight quarter due to continued strength at Old Navy and growth at Banana Republic. However, the company is witnessing softness across its namesake brand due to operational issues related to timing of inventory, breadth of the product assortment and shortage of gaps in certain categories. These factors are likely to continue hurting the brand’s comps in the second quarter. Of late, estimates have been stable.”
  • 7/25/2018 – GAP was upgraded by analysts at Zacks Investment Research from a “sell” rating to a “hold” rating. According to Zacks, “Gap’s growth strategy focused on growing its Old Navy and Athleta brands looks promising. Moreover, the company’s efforts to boost digital and mobile offerings, alongside improving product acceptance bode well. Notably, the company has an impressive surprise history as it delivered earnings beat in four of the last five quarters. Also, it marked sixth straight positive sales surprise in first-quarter fiscal 2018. Further, comps improved for the sixth straight quarter due to continued strength at Old Navy and growth at Banana Republic. However, the stock has underperformed the industry in the past year. Further, the company is witnessing softness across its namesake brand due to operational issues related to timing of inventory, breadth of the product assortment and shortage of gaps in certain categories. These factors are likely to continue hurting the brand’s comps in the second quarter. Of late, estimates have been stable.”

Shares of GPS opened at $28.23 on Friday. Gap Inc has a 52-week low of $25.36 and a 52-week high of $35.68. The company has a debt-to-equity ratio of 0.37, a quick ratio of 1.02 and a current ratio of 1.96. The firm has a market cap of $11.03 billion, a price-to-earnings ratio of 13.25, a price-to-earnings-growth ratio of 1.23 and a beta of 0.62.

GAP (NYSE:GPS) last posted its quarterly earnings results on Thursday, August 23rd. The apparel retailer reported $0.76 EPS for the quarter, topping the consensus estimate of $0.72 by $0.04. GAP had a return on equity of 29.25% and a net margin of 5.43%. The business had revenue of $4.09 billion for the quarter, compared to analyst estimates of $4.02 billion. During the same quarter in the previous year, the firm earned $0.58 EPS. The company’s quarterly revenue was up 7.5% compared to the same quarter last year. analysts forecast that Gap Inc will post 2.59 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which will be paid on Wednesday, October 31st. Stockholders of record on Wednesday, October 10th will be issued a dividend of $0.2425 per share. The ex-dividend date of this dividend is Tuesday, October 9th. This represents a $0.97 annualized dividend and a dividend yield of 3.44%. GAP’s dividend payout ratio is presently 45.54%.

In other news, Director William Sydney Fisher sold 1,000,000 shares of GAP stock in a transaction on Tuesday, June 19th. The stock was sold at an average price of $32.37, for a total transaction of $32,370,000.00. Following the transaction, the director now owns 10,760,396 shares in the company, valued at approximately $348,314,018.52. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. 27.30% of the stock is owned by insiders.

Hedge funds and other institutional investors have recently bought and sold shares of the company. Van ECK Associates Corp raised its holdings in GAP by 7.2% in the 1st quarter. Van ECK Associates Corp now owns 25,588 shares of the apparel retailer’s stock valued at $798,000 after buying an additional 1,724 shares during the period. IFM Investors Pty Ltd raised its holdings in GAP by 16.4% in the 2nd quarter. IFM Investors Pty Ltd now owns 12,571 shares of the apparel retailer’s stock valued at $407,000 after buying an additional 1,769 shares during the period. Ladenburg Thalmann Financial Services Inc. raised its holdings in GAP by 28.8% in the 1st quarter. Ladenburg Thalmann Financial Services Inc. now owns 7,928 shares of the apparel retailer’s stock valued at $246,000 after buying an additional 1,772 shares during the period. LPL Financial LLC raised its holdings in GAP by 15.0% in the 1st quarter. LPL Financial LLC now owns 13,647 shares of the apparel retailer’s stock valued at $426,000 after buying an additional 1,783 shares during the period. Finally, CIBC Asset Management Inc raised its holdings in GAP by 5.6% in the 2nd quarter. CIBC Asset Management Inc now owns 33,709 shares of the apparel retailer’s stock valued at $1,092,000 after buying an additional 1,784 shares during the period. Institutional investors and hedge funds own 58.04% of the company’s stock.

Gap, Inc operates as a global apparel retail company. It offers apparel, accessories, and personal care products for men, women and children. The company operates through segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Intermix. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody and GapFit collections.

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