Gap (GPS) May Comps Top Consensus; Should Continue Showing Improvement - Stifel

Stifel affirms Gap, Inc. (NYSE: GPS) at Buy with a price target of $48 following May sales numbers.

Analyst Richard Jaffe noted that Gap's May comps rose 1 percent, versus his estimate of a 2 percent gain. The consensus was at 0.9 percent. Merchandise assortment improvements at Old Navy and Banana Republic likely contributed to the results.

Jaffe noted, Longer term, management’s investments in e-commerce globally, international stores, and new concepts provide visibility for continued earnings growth as the rate of improvement of the core businesses slow. We are encouraged by the recent developments and the long term prospects for Gap and reiterate our Buy rating (target price $48 or approximately 15x our 2015 EPS estimate of $3.30) as improvement in performance continues, lifting results to near historical levels of profitability.

For an analyst ratings summary and ratings history on Gap, Inc. click here. For more ratings news on Gap, Inc. click here.

Shares of Gap, Inc. closed at $41.19 yesterday.

You May Also Be Interested In

• Growth isn't weak enough to truly undercut inflation pressures - BMO
• Super Micro Computer (SMCI) now down nearly 20%
• Acme United (ACU) Misses Q1 EPS by 20c