Wedbush Maintains a 'Neutral' on Gap, Inc. (GPS); Potential Upside to May Comps May Provide NT Trading Opportunity After Recent Sell Off
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Price: $24.55 --0%
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush maintains a 'Neutral' on Gap, Inc. (NYSE: GPS), PT $19.
Wedbush analyst says, "With increased promotions in May vs. April, we anticipate May comps of +0-2%, above consensus expectations of (0.6)%. We believe the combination of high inventories (~14% Q1-end) and mixed product designs has led the company to resort to deeper broad-based promotions including “30% off entire purchase” at Gap and “40% off select styles” at BR. Moreover, we expect the “Up to 50% off” at Gap and “$6 Sale” at Old Navy leading into Memorial Day weekend to further aid sales and clear out inventory at the expense of merchandise margins. We believe our Q2 and F11 estimates, as well as F11 guidance, has already embedded the margin compression from deeper markdowns and higher than expected input costs (up to +20% AUC in H2). Although there maybe some NT upside to the stock from BTE May same store sales after the recent sell off, we remain NEUTRAL on the stock given the significant margin pressure and topline weakness."
For more ratings news on Gap, Inc. click here and for the rating history of Gap, Inc. click here.
Shares of Gap, Inc. closed at $19.20 yesterday.
Wedbush analyst says, "With increased promotions in May vs. April, we anticipate May comps of +0-2%, above consensus expectations of (0.6)%. We believe the combination of high inventories (~14% Q1-end) and mixed product designs has led the company to resort to deeper broad-based promotions including “30% off entire purchase” at Gap and “40% off select styles” at BR. Moreover, we expect the “Up to 50% off” at Gap and “$6 Sale” at Old Navy leading into Memorial Day weekend to further aid sales and clear out inventory at the expense of merchandise margins. We believe our Q2 and F11 estimates, as well as F11 guidance, has already embedded the margin compression from deeper markdowns and higher than expected input costs (up to +20% AUC in H2). Although there maybe some NT upside to the stock from BTE May same store sales after the recent sell off, we remain NEUTRAL on the stock given the significant margin pressure and topline weakness."
For more ratings news on Gap, Inc. click here and for the rating history of Gap, Inc. click here.
Shares of Gap, Inc. closed at $19.20 yesterday.
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