Gap expansion into beauty could unlock new growth, says Jefferies

After Gap (GAP) announced an expansion into beauty and accessories, Jefferies called the move “more than opportunistic” and “a strategic extension of its transformation playbook.” The firm thinks these categories “could become meaningful growth engines in time” and advises investors to watch for traction in pilot rollouts and margin contribution, but adds that the impact “could take time to show in P&L.” The firm has a Hold rating and $22 price target on Gap shares.