UPDATE: Citi Downgrades Gap, Inc. (GPS) to Sell

Citi analyst Paul Lejuez downgraded Gap, Inc. (NYSE: GPS) from Neutral to Sell with a price target of $8.00 (from $13.00).

The analyst comments " We are downgrading GPS from Neutral to Sell. The company’s most important business, Old Navy (accounting for 55% of F21 sales and an estimated 80% of profits), is in a tough spot with too much inventory at the same time that large competitors, TGT, KSS and WMT, also have too much apparel inventory (especially in basics). WMT and TGT are kicking up promotions in apparel (at the same time Old Navy is promoting more to get inventory back on track). This dynamic, which is occurring at the same time that the lower income consumer is feeling stretched (and shifting purchases away from discretionary items), is likely to lead to continued sales and profit weakness for Old Navy."

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 $10.93 yesterday.

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