UPDATE: Canaccord Genuity Upgrades Gap, Inc. (GPS) to Buy

(Updated - June 18, 2014 8:01 AM EDT)

Canaccord Genuity upgraded Gap, Inc. (NYSE: GPS) from Hold to Buy with a price target of $51.00 (from $47.00).

Analyst Laura Champine said, "We believe the omni-channel and supply-chain initiatives GPS is executing will drive greater long-term margin expansion than we had previously forecast. The company is introducing new online services that we believe can improve traffic and conversion rates both online and in stores. At the same time, the transition to a more responsive supply chain should enable GPS to reduce costs, shorten lead times, and provide a more consistent trend-right assortment. We expect these efforts to result in leaner inventories and greater margin contributions as markdown and promotional levels decrease. We are raising our rating to BUY as we do not believe GPS’s upside potential is fully reflected with the stock trading at 14x our FY14 EPS estimate and 7x FY14E EV/EBITDA."

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 $41.24 yesterday.

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