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Here Are 6 Reasons Why 1 Analyst Upgraded The Gap

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Courtesy of Benzinga.

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In a report published Tuesday, FBR & Co. analyst Susan Anderson upgraded shares of Gap Inc (NYSE: GPS) to Outperform as 2015 could prove to be a "breakout" year.

Anderson acknowledged the potential for continued segment pressure at the Gap core brand, but the risk is outweighed by "substantial" 2015 tailwinds which include:

  • 1. Stabilizing promotional and clearance levels.
  • 2. Reduced inventory levels that could drive average unit revenue and reduced markdowns.
  • 3. Continued execution at Old Navy.
  • 4. Supply chain enhancements including responsive supply chain, fabric platforming and seamless inventory.
  • 5. Favorable cotton price benefits to take effect in the second half of 2015.
  • 6. "Refreshed" initiatives from the new CEO Art Peck.

"We believe that Gap's guidance conservatively does not take into account these factors," Anderson concluded.

Shares were upgraded to Outperform from Market Perform with a price target raised to $48 from a previous $39.

Latest Ratings for GPS

Date Firm Action From To
Mar 2015 FBR Capital Upgrades Outperform
Feb 2015 Credit Suisse Downgrades Neutral Underperform
Feb 2015 Mizuho Securities Downgrades Buy Neutral

View More Analyst Ratings for GPS
View the Latest Analyst Ratings

Posted-In: Art Peck FBR Old Navy Susan AndersonAnalyst Color Upgrades Price Target Analyst Ratings

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