GAP (NYSE:GAP) Shares Climb 4% - Time to Buy?

Key Points

• GAP shares rose 4% to approximately $22.70, although trading volume was 94% below the average session volume.
• Analysts maintain a consensus “Hold” rating with an average price target of $27.07; recent recommendations range from Strong Buy to Sell.
• GAP exceeded quarterly EPS expectations ($0.52 versus $0.48) but revenue fell 2% year over year to $3.65 billion. The company also declared a $0.175 quarterly dividend, implying a 3.0% annual yield.

Shares of The Gap, Inc. (NYSE:GAP - Get Free Report) traded up 4% on Monday. The company traded as high as $22.47 and last traded at $22.6990. Approximately 453,667 shares traded hands during trading, a decline of 94% from the average session volume of 7,725,701 shares. The stock had previously closed at $21.82.

Analyst Ratings Changes

Several brokerages have recently issued reports on GAP. BMO Capital Markets began coverage on shares of GAP in a report on Tuesday, September 8th. They issued a "market perform" rating and a $23.00 target price for the company. UBS Group lifted their price target on shares of GAP from $40.00 to $42.00 and gave the stock a "buy" rating in a research note on Friday, August 28th. Jefferies Financial Group cut shares of GAP from a "buy" rating to a "hold" rating and reduced their price target for the company from $29.00 to $23.00 in a research report on Wednesday, August 12th. Bank of America raised their price objective on GAP from $26.00 to $27.00 and gave the stock a "neutral" rating in a report on Friday, August 28th. Finally, Wells Fargo & Company lifted their target price on GAP from $22.00 to $23.00 and gave the stock a "cautious" rating in a research report on Friday, August 28th. Two research analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, eleven have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, GAP presently has an average rating of "Hold" and an average price target of $27.07.

GAP Trading Up 6.1%

The firm has a market cap of $8.13 billion, a price-to-earnings ratio of 6.91, a PEG ratio of 0.91 and a beta of 2.08. The business has a fifty day moving average of $20.80 and a two-hundred day moving average of $22.03. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.11 and a current ratio of 1.82.

GAP (NYSE:GAP - Get Free Report) last issued its quarterly earnings data on Thursday, August 27th. The company reported $0.52 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.48 by $0.04. The firm had revenue of $3.65 billion during the quarter, compared to analysts' expectations of $3.69 billion. GAP had a return on equity of 19.72% and a net margin of 8.14%.GAP's revenue was down 2.0% on a year-over-year basis. During the same period in the previous year, the firm posted $0.57 earnings per share. GAP has set its FY 2026 guidance at 2.350-2.450 EPS. As a group, equities analysts expect that The Gap, Inc. will post 2.41 earnings per share for the current fiscal year.

GAP Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, October 28th. Investors of record on Wednesday, October 7th will be given a $0.1750 dividend. The ex-dividend date is Wednesday, October 7th. This represents a $0.70 annualized dividend and a dividend yield of 3.0%. GAP's payout ratio is currently 20.90%.

Hedge Funds Weigh In On GAP

Several hedge funds have recently added to or reduced their stakes in the business. Sequoia Financial Advisors LLC increased its stake in shares of GAP by 26.2% during the 2nd quarter. Sequoia Financial Advisors LLC now owns 172,326 shares of the company's stock worth $3,219,000 after purchasing an additional 35,747 shares in the last quarter. Tidal Investments LLC lifted its stake in GAP by 60.6% in the 2nd quarter. Tidal Investments LLC now owns 64,329 shares of the company's stock valued at $1,202,000 after buying an additional 24,265 shares in the last quarter. Engineers Gate Manager LP acquired a new stake in GAP during the 2nd quarter valued at $4,216,000. Empirical Finance LLC increased its position in GAP by 6.7% during the second quarter. Empirical Finance LLC now owns 44,937 shares of the company's stock worth $839,000 after buying an additional 2,839 shares in the last quarter. Finally, Nykredit A S purchased a new position in GAP during the second quarter worth $129,000. 58.81% of the stock is currently owned by hedge funds and other institutional investors.

About GAP

Gap Inc is an American specialty apparel retailer founded in 1969 by Donald and Doris Fisher in San Francisco, California. The company operates a portfolio of consumer brands focused on clothing, accessories and personal-care products for women, men and children.

Its principal brands include Old Navy, Gap, Banana Republic and Athleta. Products are sold through company-operated stores, franchise locations and digital channels, with offerings spanning casual apparel, denim, activewear, accessories and lifestyle products.

Gap Inc serves customers in North America and selected international markets through its retail and e-commerce operations.

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