Mizuho Securities Remains Sidelined on Gap, Inc. (GPS) Following In-Line Comp Report
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Mizuho Securities reiterated a Neutral rating and $24.00 price target on Gap, Inc. (NYSE: GPS) following the company's September comp report. The company reported comps of (3)%, in-line with the Street’s (3.1)% estimate. Total sales decreased (2)% to $1.43bn vs. $1.46bn LY.
Analyst Betty Chen commented, "We expect shares will react positively to in-line September comps that point to sequential improvement. Importantly, the underlying business, excluding the ~3pt impact from the Fishkill DC fires, points to improvement in merchandise margins and a more encouraging response to the assortment, especially at Old Navy. With easier compares ahead and more muted FX headwinds, we view consensus FY16 outlook as achievable. Moreover, we believe current valuation of ~11x P/E fairly weighs near-term improvement at ON and the long road to recovery at Gap and BR."
Shares of Gap, Inc. closed at $22.78 yesterday.
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