Wells Fargo Downgrades Gap, Inc. (GPS) to Market Perform; Risk/Reward Even

Wells Fargo downgraded Gap, Inc. (NYSE: GPS) from Outperform to Market Perform with a price target range of $17-$19.

Wells analyst says, "While GPS reaffirmed its 2011 EPS guidance at its analyst day yesterday (10/13), we see some risk (our estimate is at the low end of guidance) given recent comp trends, difficulty in taking pricing at Old Navy without impacting traffic and the length of time before initiatives at Gap start to bear fruit. On the other hand, there could be further margin opportunity next year from lower cotton prices and lapping the heavy markdowns of this year, GPS has consistently shown an ability to manage expenses and valuation is depressed. We move to a Market Perform rating given limited upside potential to our valuation range of $17-19 and our belief that the risk/reward is even at current levels."

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 $17.92 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Deutsche Bank Downgrades Workday (WDAY) to Hold
• Barclays Downgrades Murphy Oil Corp. (MUR) to Underweight
• Clear Street Downgrades Kinetik Holdings, Inc. (KNTK) to Hold Citing Valuation