Gap (GAP) stock is up as much as 10% on Nov. 21 after the San Francisco-based company reported stronger-than-expected financial results for this year’s third quarter.
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Gap managed to buck the trend of weak results posted by many retailers, who complain of tariff impacts and slowing consumer spending. The strong print appears to have reignited interest in the clothing retailer among investors who are bidding up its stock.
Gap’s Q3 financial results were a welcome relief in a week dominated by gloomy earnings from major U.S. retailers such as Home Depot (HD) and Target (TGT). Weak profit and sales numbers, along with lowered guidance, sent many retail stocks plunging in recent days.
The Gap’s Strong Showing
The Gap reported earnings per share (EPS) of $0.62, which was ahead of the $0.59 consensus expectation of analysts. Revenue of $3.94 billion topped the $3.91 billion that was forecast on Wall Street.
Management said its sales and profits got a boost from its viral “Better in Denim” marketing campaign that featured popular girl group Katseye. In terms of guidance, the Gap said it now expects its full-year sales to be at the high end of its previous forecast that calls for 1.7% to 2% growth, which is in line with Wall Street expectations.
Is GAP Stock a Buy?
GAP stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on eight Buy and six Hold recommendations issued in the last three months. The average GAP price target of $28.69 implies 14.94% upside from current levels.
