Gap Inc: Buy Rating Affirmed Amid Brand Revitalization and Attractive Valuation

Morgan Stanley analyst Alexandra Straton maintained a Buy rating on Gap Inc (GAP – Research Report) today and set a price target of $27.00.

Alexandra Straton has given her Buy rating due to a combination of factors including Gap Inc’s ongoing brand reinvigoration efforts and the potential for positive earnings per share (EPS) revisions in the near term. Despite the company’s inconsistent performance across different banners, the management’s strategies to revitalize the brand have shown promising results, supporting a long-term margin expansion story.
Additionally, the valuation of Gap Inc remains attractive, with a price-to-earnings ratio of approximately 11 times based on the midpoint of the tariff-impacted 2025 EPS guidance. Although there are challenges such as tariff headwinds and the need for reinvestment in cost savings, these factors are expected to be temporary. Therefore, the potential for EPS growth and the current valuation justify maintaining an Overweight rating with a price target of $27.

In another report released today, Citi also maintained a Buy rating on the stock with a $30.00 price target.

Based on the recent corporate insider activity of 80 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GAP in relation to earlier this year.