FBR Capital Reiterates Market Perform on Gap, Inc. (GPS) Following 2Q Beat
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FBR Capital reiterated a Market Perform rating and $22.00 price target on Gap, Inc. (NYSE: GPS) following the company's 2Q earnings report. The company reported EPS of $0.60, ahead of the consensus estimates $0.58, slightly above the $0.58–$0.59 EPS guidance. Management guided 2016 EPS to $1.87–$1.92, in line with what management had indicated as achievable, last call.
Analyst Susan Anderson commented, "GPS reported 2Q16 EPS of $0.60 (versus FBR/consensus of $0.58), slightly above the $0.58–$0.59 EPS guidance provided on August 8 during GPS's July SSS call. It also reported 1Q sales of $3.9B (–1.2% YOY) and comps of –2% on the previous call. The –2% comp for 2Q was primarily driven by traffic (down). Management guided 2016 EPS to $1.87–$1.92, roughly in line with what management had indicated as achievable, last call, if traffic trends improved, and significantly below original guidance of $2.20–$2.25 given on the 4Q15 EPS call. ON showed significant sequential improvement, which we view as a positive. However, we remain on the sidelines until we see sustained improvement at ON or positive comps consistently at Gap, as well as increased international visibility, inflection at BR, an overall return to positive comps, or a more attractive entry point."
Shares of Gap, Inc. closed at $25.88 yesterday.
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