Janney Montgomery Scott maintains a 'Neutral' on Gap, Inc. (GPS); Improving Inventory & Focusing on Total Sales Growth
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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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Janney Montgomery Scott maintains a 'Neutral' on Gap, Inc. (NYSE: GPS).
JMS analyst says, "We expect ongoing negative comps and margin contraction, but believe aggressive buybacks will likely support EPS. Sentiment and 2H11 expectations are low for GPS, and we also note that as cotton anniversaries itself (potentially in 3Q/4Q11), GPS should see margin benefit nine months out, suggesting easing of margin pressure in 2H12. As customer reception has languished, we will monitor changes in merchandising strategy. However, we do not foresee any near-term improvement capable of moving the needle, but note that valuation and buybacks are likely to keep the stock at current levels. While we currently remain at Neutral, we would look for improved product at Gap and improved traffic at Old Navy as indications that the business had stabilized and is improving."
"Raising estimates slightly; maintaining fair value. We are raising our FY11 estimates to $1.49 from $1.48 (the Street is at $1.47) and FY12 goes to $1.71 from $1.70 (the Street is at $1.74), as aggressive share repurchases support EPS growth. We are maintaining our fair value of $19 which is 11.0x (based on a 11% three-year earnings growth rate) our FY12 EPS of $1.71."
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 $15.52 yesterday.
JMS analyst says, "We expect ongoing negative comps and margin contraction, but believe aggressive buybacks will likely support EPS. Sentiment and 2H11 expectations are low for GPS, and we also note that as cotton anniversaries itself (potentially in 3Q/4Q11), GPS should see margin benefit nine months out, suggesting easing of margin pressure in 2H12. As customer reception has languished, we will monitor changes in merchandising strategy. However, we do not foresee any near-term improvement capable of moving the needle, but note that valuation and buybacks are likely to keep the stock at current levels. While we currently remain at Neutral, we would look for improved product at Gap and improved traffic at Old Navy as indications that the business had stabilized and is improving."
"Raising estimates slightly; maintaining fair value. We are raising our FY11 estimates to $1.49 from $1.48 (the Street is at $1.47) and FY12 goes to $1.71 from $1.70 (the Street is at $1.74), as aggressive share repurchases support EPS growth. We are maintaining our fair value of $19 which is 11.0x (based on a 11% three-year earnings growth rate) our FY12 EPS of $1.71."
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 $15.52 yesterday.
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