Mizuho Securities Adjusts Estimates Following Gap, Inc. (GPS) Comp Miss

Mizuho Securities maintained a Neutral rating on Gap, Inc. (NYSE: GPS), and cut the price target to $27.00 (from $28.00), following a slight November comp miss. The company reported comps of (1)%, below the Street’s +0.4% estimate. Total sales declined (2.5)% to $1.53bn. Mizuho trimmed 4Q EPS estimates to $0.48 from $0.50 on +1% comps.

Analyst Betty Chen commented, "We are lowering our estimates and PT to $27 from $28 following disappointing Old Navy performance on the first month of the holiday season. Despite encouraging sequential improvement at both Gap and BR, we believe they were promotionally driven to clear through inventory ahead of new deliveries in Spring ‘17. Importantly, the slow down at ON (~55% of total sales and the steady performer throughout much of FY16) provides pause, especially since the concept is lapping the easiest compare of the year, and may result in incremental promotions to obtain market share during the balance of the season in the highly competitive value segment."

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 $25.05 yesterday.

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