Q4 Preview: Gap (GPS) Hoping Aggressive Marking, Management Changes Paid Off (AEO) (ANF)
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Price: $24.55 --0%
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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The Gap Inc. (NYSE: GPS) shares are down 10 cents to $22.33 in midday market movement on Thursday heading into the company's fourth-quarter earnings scheduled after the closing bell.
The clothing retailer is expected to report first-quarter earnings of $0.57 per share on sales of $4.28 billion.
In the third-quarter, Gap matched the Street with earnings of $0.48 per share, in line with the analyst estimate. The company also reported revenue of $3.65 billion last quarter, just topping the Street's view of $3.62 billion.
Since the start of the first quarter, shares of Gap are up $1.43 or 6.87 percent. Over the last year the stock is up $1.94 or 9.56 percent.
A valuation shows that Gap is going for a forward P/E of 12.36x full year estimates. This compares to rivals American Eagle Outfitters (NYSE: AEO) at 20.32x, Abercrombie & Fitch (ANF) at 41.39x.
Data from Bloomberg shows that 12 analysts have a Buy rating on the stock, 18 have a Hold and 1 has a Sell. The average analyst price target on Gap is $23 with a target range of $17.50 to $28.
Analyst Comments:
Wedbush analysts maintain a Neutral rating in Gap with a $20 price target on the stock. The firm said, "Following aggressive promotions in H2 to clear excess inventory and recent management changes at the Gap brand, we believe it could be difficult for the company to lap tough Spring comparisons. Specifically, the appointment of new Gap President implies product from the new team may not materialize until Fall/Holiday 2011, potentially leading to inconsistent comps in H1.
Keybanc analysts maintain a Buy rating on Gap with a price target of $26. The firm says, "Performance should improve due to recent management changes. We viewed the recent departure of Marka Hansen and the elevation of Art Peck, in addition to other key management changes, as a positive catalyst within the Gap banner. We think that the changes, including the formation of Global Creative Center in New York, and arguably more streamlined management structure will drive a more responsive Gap banner."
Janney Capital Markets analysts maintain a Neutral rating on Gap with a fair value estimate of $21 on the stock. "We expect the company to revert to a tight inventory position in 2011 and pursue a balanced strategy of driving sales with promotions but also returning to focusing on gross margin. We also expect management to remain aggressive in 2011 with its buyback activity."
The clothing retailer is expected to report first-quarter earnings of $0.57 per share on sales of $4.28 billion.
In the third-quarter, Gap matched the Street with earnings of $0.48 per share, in line with the analyst estimate. The company also reported revenue of $3.65 billion last quarter, just topping the Street's view of $3.62 billion.
Since the start of the first quarter, shares of Gap are up $1.43 or 6.87 percent. Over the last year the stock is up $1.94 or 9.56 percent.
A valuation shows that Gap is going for a forward P/E of 12.36x full year estimates. This compares to rivals American Eagle Outfitters (NYSE: AEO) at 20.32x, Abercrombie & Fitch (ANF) at 41.39x.
Data from Bloomberg shows that 12 analysts have a Buy rating on the stock, 18 have a Hold and 1 has a Sell. The average analyst price target on Gap is $23 with a target range of $17.50 to $28.
Analyst Comments:
Wedbush analysts maintain a Neutral rating in Gap with a $20 price target on the stock. The firm said, "Following aggressive promotions in H2 to clear excess inventory and recent management changes at the Gap brand, we believe it could be difficult for the company to lap tough Spring comparisons. Specifically, the appointment of new Gap President implies product from the new team may not materialize until Fall/Holiday 2011, potentially leading to inconsistent comps in H1.
Keybanc analysts maintain a Buy rating on Gap with a price target of $26. The firm says, "Performance should improve due to recent management changes. We viewed the recent departure of Marka Hansen and the elevation of Art Peck, in addition to other key management changes, as a positive catalyst within the Gap banner. We think that the changes, including the formation of Global Creative Center in New York, and arguably more streamlined management structure will drive a more responsive Gap banner."
Janney Capital Markets analysts maintain a Neutral rating on Gap with a fair value estimate of $21 on the stock. "We expect the company to revert to a tight inventory position in 2011 and pursue a balanced strategy of driving sales with promotions but also returning to focusing on gross margin. We also expect management to remain aggressive in 2011 with its buyback activity."
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