Gap upgraded to Buy at Argus amid ‘revitalizing’ brands

As previously reported, Argus analyst Christine Dooley upgraded Gap (GAP) to Buy from Hold with a $27 price target The company’s brands – Gap, Banana Republic, Old Navy, and Athleta – had lagged the market badly over the past five years, but recently started to turn upward as its management team has done a good job of revitalizing the brands while also forecasting earnings growth over the next several quarters, the analyst tells investors in a research note. Gap shares are also trading at a low P/E ratio of 11-times forecast earnings and also at a discount on price/sales basis compared to the peer group, while its dividend yield is above the peer average, the firm adds.