Gap risk/reward ‘compelling’ at current levels, says Guggenheim

Guggenheim believes several recent developments at Gap are providing “renewed optimism and upside potential for the shares.” Most importantly, the firm is encouraged board member Richard Dickson is starting as CEO on August 22. In the near to medium term, the analyst sees potential for improving gross margins and operating margins and earnings growth. The risk/reward ratio of Gap is “compelling” at current levels, the analyst tells investors in a research note. Guggenheim keeps a Buy rating on the shares with an $18 price target.