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Research Alert: CFRA Maintains Sell Opinion On Shares Of The Gap, Inc.
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Research Alert: CFRA Maintains Sell Opinion On Shares Of The Gap, Inc.
May 31, 2024 5:15 AM

07:55 AM EDT, 05/31/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month price target by $5 to $20, based on 12.5x our FY 25 (Jan.) EPS estimate and below the company's 1-year average forward P/E multiple of 15.0x, reflecting the company's below peer operating margin and top-line growth. We raise our FY 25 EPS estimate by $0.40 to $1.60 and maintain our FY 26 EPS estimate of $1.25. GPS posts normalized Q1 EPS of $0.42 vs. $0.01, $0.25 above consensus estimates on revenues of $3.39B vs. $3.28B and $101M above estimates. By brand in Q1, Old Navy revenues increased 5% Y/Y, Gap sales were flat, Banana Republic increased 2%, and Athleta increased 2%. Q1 adjusted gross margin expanded 410 bps Y/Y to 41.2% due to lower commodity costs. GPS raised its operating income guidance to increased mid 40% from last year's $606M. We continue to believe shares of GPS are overvalued as the company continues to underperform peers across the board and trade above 15x NTM EPS estimates. We see plenty of better options in apparel.

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