Goldman Sachs Comments on Gap's (GPS) Disappointing August Comps; Analyst Expects Pressure on Shares

Goldman Sachs maintained a Neutral rating on Gap, Inc. (NYSE: GPS) with a price target of $44. Comments follow data on August comps, which showed a 2% decline. In the view of analyst Lindsay Drucker Mann, shares will be pressured today.

"We expect shares will come under pressure on Sep 5 given Gap brand weakness, which is likely to raise concerns about a reversal of recent comp sales growth. September will see the delivery of the first assortment assembled by the merchant and design team of Michelle DeMartini and Rebekka Bay, but we believe it is premature to speculate on the success of the assortment and await visibility on the consumer response. We also note excess inventory exiting August at Gap brand could have negative implications for direct competitors as they look to clear product. On the positive side, Old Navy is taking share of the value segment and is offsetting Gap margin challenges," said Drucker Mann.

Goldman lower our FY14/15/16 EPS estimates to $2.91/$3.35/$3.64 from $2.95/$3.39/$3.68.

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 $46.59 yesterday.

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