Gap Inc.: Strong Merchandise Execution and Strategic Focus Drive Buy Rating

Gap Inc.: Strong Merchandise Execution and Strategic Focus Drive Buy Rating

TD Cowen analyst Jonna Kim maintained a Buy rating on Gap Inc (GAPResearch Report) today and set a price target of $27.00.

Jonna Kim’s rating is based on Gap Inc.’s strong merchandise execution and financial discipline, which are expected to lead to sustainable growth and improved margins. Despite facing a challenging macroeconomic environment and tough comparisons in the first half of 2025, Gap is strategically focusing on revitalizing its brands. The company’s guidance appears reasonable, with potential for positive surprises.
Gap Inc.’s impressive fourth-quarter 2024 earnings, driven by notable comparable sales growth at Gap and Old Navy, have contributed to a positive market reaction. The company’s management has shown confidence in its merchandise strategy, particularly in regions with favorable weather conditions. Additionally, Gap’s capital allocation priorities, including investments in organic growth, increased dividends, and strategic share buybacks, are expected to enhance shareholder value. These factors collectively support Jonna Kim’s Buy rating for Gap Inc., with a price target of $27.

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

Based on the recent corporate insider activity of 85 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.

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