Gap: Our Long-Term Thesis Remains Intact Despite Soft June SSS, Says Canaccord

In a research note issued yesterday, Canaccord Genuity analyst Laura Champine maintained a Buy rating on Gap (GPS) and reduced her price target to $50 (from $51) following a 2% decline in June same-store-sales.

Champine noted, “We continue to see the bigger picture here, as GPS’s omni-channel and supplychain initiatives should help reduce the company’s dependence on markdowns and promotions. This in turn should drive healthy margin expansion over the longer term. We are modeling for 140bps of cumulative operating margin expansion over the next five years. We remain buyers with shares trading at 14x our FY14 EPS estimate and 7x FY14E EV/EBITDA”.

According to, which measures analysts and bloggers success rate based on how their calls perform, analyst Laura Champine currently has a one-year average return of 5.7% and a 48% success rate. Champine has a -8.8% when recommending GPS, and is ranked #889 out of 3211 analyst.

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