Guggenheim analyst Robert Drbul reiterated a Hold rating on Gap (GPS) today. The company’s shares closed last Monday at $19.18.
“We would be remiss not to mention the underwhelming 1H19 performance, with comps falling 4% driven by declines across all three of GPS’ largest brands. Additionally, the comp performance drove substantial margin contraction and EPS declines. While management highlighted numerous initiatives to improve operations across both companies and Athleta remains a standout, given our expectations for a muted top line and continued margin contraction, we remain NEUTRAL-rated until we see evidence of strategies taking hold. Overall, we believe shares are fairly valued today, trading at ~9x our current GPS FY2020 EPS.”
According to TipRanks.com, Drbul is a 5-star analyst with an average return of 8.9% and a 67.4% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Capri Holdings Limited, and Ralph Lauren Corp.
Gap has an analyst consensus of Hold, with a price target consensus of $20.
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Based on Gap’s latest earnings release for the quarter ending July 31, the company reported a quarterly revenue of $4.01 billion and net profit of $168 million. In comparison, last year the company earned revenue of $4.09 billion and had a net profit of $297 million.
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Gap, Inc. operates as a global apparel retail company. It offers apparel, accessories, and personal care products for men, women and children. The company operates through segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Intermix.