Deutsche Bank Upgrades Gap, Inc. (GPS) at Buy; 'Making a Comeback With Improving Profitability'
- Second half starts with fresh swings for stocks
- Goldman Sachs Warns Clients of More Equity Market Losses in Second Half of 2022
- Kohl's (KSS) Plunges 15% After Reportedly Terminating Sale Talks with Franchise Group
- Micron Slips on Soft Guidance, BofA Downgrades on 'Large but Insufficient Reset'
- JPMorgan 'Not as Worried as the Street' on Apple (AAPL) Heading into Earnings
(Updated - July 26, 2021 7:22 AM EDT)
Deutsche Bank analyst Gabriella Carbone upgrades Gap, Inc. (NYSE: GPS) from Hold to Buy and raises the price target to $42 (from $38).
The analyst commented, "Since our transfer of coverage on 6/18, we have taken a fresh look at GPS and are upgrading the stock to Buy from Hold as we believe volatile trends are now largely behind the company and see a path to consistent EBIT margin gains, largely driven by a reduction in fixed costs (e.g. store fleet restructuring; which we view as underappreciated), the mix shift to higher-margin and growth businesses (Old Navy and Athleta), improved profitability at the Gap brand with increasing consumer engagement, and demand generation investments driving market share gains. In our view, GPS is a very different company now than it was pre-pandemic given the removal of "trap" costs within the business, and we see the potential for the stock to move higher due to our assumption for ongoing EBIT dollar growth (modeling a 15% CAGR from 2019-2023)."
Shares of Gap, Inc. closed at $29.14 yesterday.
You May Also Be Interested In
- UPDATE: Atlantic Equities Upgrades First Republic Bank (FRC) to Overweight
- UPDATE: Western Digital Corp. (WDC) PT Lowered to $65 at Benchmark
- UPDATE: Daiwa Securities Starts Paramount Global (PARA) at Neutral (4)
Create E-mail Alert Related CategoriesAnalyst Comments, Hot Upgrades, Upgrades
Related EntitiesDeutsche Bank
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!