Analyst Alexandra Straton from Morgan Stanley maintained a Buy rating on Gap Inc and keeping the price target at $27.00.
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Alexandra Straton has given her Buy rating due to a combination of factors that reflect both the challenges and opportunities facing Gap Inc. Despite some setbacks, such as the underperformance of the Athleta brand and the impact of tariffs, management’s strategies to revitalize other brands have shown promising results. This is evident in the company’s profitability, which is improving when excluding tariff effects, and the potential for a positive earnings revision in the near term.
Moreover, Gap Inc.’s valuation remains attractive, being one of the lowest within the coverage area, which presents a compelling investment opportunity. The company’s earnings per share slightly exceeded expectations, thanks to lower-than-anticipated selling, general, and administrative expenses, although this was partly due to a shift in technology investment spending. Overall, Straton’s rating reflects confidence in management’s ability to navigate current challenges and capitalize on growth opportunities, making the stock a worthwhile consideration for investors.
According to TipRanks, Straton is a 4-star analyst with an average return of 5.0% and a 54.69% success rate. Straton covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Tapestry, and Gap Inc.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $25.00 price target.