UPDATE: Gap, Inc. (GPS) PT Lowered to $20 as Morgan Stanley Sees a Show Me Story

November 24, 2021 2:37 AM EST
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Price: $12.81 +2.32%

Rating Summary:
    9 Buy, 26 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 16 | New: 12
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(Updated - November 24, 2021 9:11 AM EST)

Morgan Stanley analyst Kimberly Greenberger lowered the price target on Gap, Inc. (NYSE: GPS) to $20.00 (from $25.00) after the company's 3Q21 EPS miss was worse-than-feared and although the supply chain & inventory headwinds were well-understood, the company's "mis-execution stands out against peers".

The analyst reiterated an Equalweight rating, stating "While Vietnam factory closures & inventory delays have universally impacted Softlines retailers’ revenue & earnings results this quarter, GPS’ topline miss represents 1) one of only 4 total in our coverage this earnings season (NKE, SKX, VSCO, & GPS), & 2) the most severe miss in magnitude. Even if we adjust the topline for $300M management estimated it lost in sales from inventory constraints, GPS would have still missed revenue by 4% vs. consensus. This makes us wonder if GPS could be experiencing both demand and supply challenges, and leaves the broader turnaround in question in our view."

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