Shares of the Gap (GAP) are up 5% on news that analysts at JPMorgan Chase (JPM) have upgraded the clothing retailer’s stock.
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JPMorgan upgraded shares of the Gap to a Buy-equivalent overweight rating from neutral previously, and lifted its price target on the stock to $30 from $28. The new price target implies 24% upside from the stock’s previous close on November 29.
In a note to clients, JPMorgan retail analyst Matthew Boss said that he upgraded GAP stock after seeing steady gains in the company’s revenue and market share in recent quarters. Boss expects margin expansion and strong revenue growth to continue moving forward.
Meeting with GAP Management
After meeting with Gap’s management team, JPMorgan’s Boss said the foundation has been laid under CEO Richard Dickson to support improvements in merchandising and marketing across all four of the company’s brands: Gap, Old Navy, Banana Republic, and Athleta.
“After roughly 1.5 years at the helm, CEO Dickson characterized the company at an inflection point moving to continuous improvement from fixing fundamentals following four straight quarters of revenue growth and seven consecutive quarters of market share expansion,” wrote Boss.
Going forward, JPMorgan expects historic levels of profitability from the Gap. In November, Gap reported a 2% rise in its third-quarter sales, totaling $3.8 billion. GAP stock is up 27% this year.
Is GAP Stock a Buy?
Gap stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy, seven Hold, and one Sell recommendations assigned in the last three months. The average GAP price target of $28 implies 9.33% upside from current levels.
