Citi Opens 30-Day Upside Catalyst Watch on Gap, Inc. (GPS)

Citi analyst Paul Lejuez reiterated a Buy rating and $28.00 price target on Gap, Inc. (NYSE: GPS).

The analyst comments "We anticipate a big 1Q EPS beat (AMC 5/30) of $0.25 (cons $0.14), driven by stronger ON comps of +4% (cons +2%) and stronger GM (+220bps vs cons +160bps). We expect mgmt to maintain F24 sales guidance of -1% but raise implied F24 EPS guidance from $1.30-1.35 to ~$1.40+ based on stronger GM. We see mgmt guiding 2Q relatively in-line w/cons $0.34. As we highlighted in our 5/7 upgrade note, we expect both sales/EPS upside in F24 driven by stronger ON comps, disciplined expense mgmt and stronger GM, and we expect 1Q to highlight this dynamic. We anticipate an acceleration in ON comps in 2Q as they face easy comparisons LY (particularly in active) and see 2Q GM upside vs consensus as they lap heavy active markdowns LY. With sentiment more mixed on GPS recently, we believe the risk/reward is favorable into 1Q EPS."

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 $21.22 yesterday.

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