Jefferies Cuts Price Target on Gap, Inc. (GPS) to $26 Following 1Q Report
Jefferies maintained a Buy rating on Gap, Inc. (NYSE: GPS), and cut the price target to $26.00 (from $28.00) following the company's 1Q earnings report. GPS announced a series of actions (including the exit of Old Navy Japan) that will reduce annualized expenses by $275M (with much of the benefit falling in FY'18) and benefit op margins by 2 points.
Analyst Randal Konik commented, "While 1Q results (pre-announced) were disappointing, we are encouraged to see signs of the Gap brand moving in the right direction, while weakness at ON has been diagnosed. Although the environment remains choppy, we expect streamlining actions to help stabilize margins. We view the shares as attractive here and reiterate Buy."
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Shares of Gap, Inc. closed at $17.28 yesterday.