Citi opens ‘positive catalyst watch’ on Gap into earnings

Citi opened a “30-day positive catalyst watch” on shares of Gap while keeping a Buy rating on the name with a $32 price target. The firm anticipates a “big” earnings beat for Q2 when the company reports on August 29, driven by stronger gross margin and slightly stronger sales versus consensus. Citi expects management to raise fiscal 2024 sales and implied earnings guidance from $1.60 to $1.70-plus, flowing through the Q2 beat. With sentiment mixed on Gap, the stock’s risk/reward is favorable into the earnings prints, contends Citi.