Gap shares ‘fully valued’, says Argus

Argus keeps a Hold rating on Gap while noting that the stock looks “fully valued” at 11-times expected forward earnings. The company reported “strong” Q2 results thanks to lower costs and less discounting, though Argus does not expect this outsized growth to continue, with the management’s guidance implying a moderation in sales and gross margin growth in the second-half of FY25, the analyst tells investors in a research note. Much work lies ahead for Gap as it works to reposition its brands, improve its assortment and engage its customers, Argus added.