GAP (NYSE:GAP) Trading 5% Higher - Still a Buy?

Key Points

• GAP shares rose about 5% to roughly $21.17, though trading volume was 83% below the average daily level.
• Analyst sentiment remains cautiously positive, with a consensus “Moderate Buy” rating and an average price target of $26.29; however, several firms recently lowered targets or downgraded the stock to “Hold” or “Neutral.”
• The company slightly missed quarterly earnings and revenue estimates, while maintaining fiscal 2026 EPS guidance of $2.30–$2.40. GAP also declared a quarterly dividend of $0.175, equivalent to a 3.3% annual yield.

The Gap, Inc. (NYSE:GAP - Get Free Report) shares traded up 5% during mid-day trading on Wednesday . The stock traded as high as $21.12 and last traded at $21.1650. 1,288,522 shares traded hands during trading, a decline of 83% from the average daily volume of 7,604,655 shares. The stock had previously closed at $20.15.

Analyst Ratings Changes

GAP has been the subject of a number of analyst reports. Bank of America decreased their price target on GAP from $29.00 to $26.00 and set a "neutral" rating for the company in a research note on Friday, May 29th. Morgan Stanley reiterated an "equal weight" rating and set a $21.00 price objective on shares of GAP in a research note on Monday, July 6th. Jefferies Financial Group cut shares of GAP from a "buy" rating to a "hold" rating and decreased their target price for the company from $29.00 to $23.00 in a research note on Wednesday, August 12th. Barclays restated an "equal weight" rating and set a $20.00 target price (down from $26.00) on shares of GAP in a report on Tuesday, August 11th. Finally, Evercore set a $20.00 price target on shares of GAP and gave the stock an "in-line" rating in a research report on Friday, May 29th. Two research analysts have rated the stock with a Strong Buy rating, five have given a Buy rating and eleven have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $26.29.

GAP Trading Up 5.7%

The business has a 50-day simple moving average of $20.01 and a two-hundred day simple moving average of $22.98. The stock has a market cap of $7.67 billion, a price-to-earnings ratio of 8.38, a P/E/G ratio of 1.21 and a beta of 2.05. The company has a debt-to-equity ratio of 0.41, a current ratio of 1.81 and a quick ratio of 1.08.

GAP (NYSE:GAP - Get Free Report) last released its quarterly earnings data on Thursday, May 28th. The company reported $0.38 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.39 by ($0.01). GAP had a net margin of 6.25% and a return on equity of 21.13%. The business had revenue of $3.50 billion during the quarter, compared to the consensus estimate of $3.52 billion. During the same quarter in the prior year, the company earned $0.51 EPS. GAP's quarterly revenue was up 1.0% on a year-over-year basis. GAP has set its FY 2026 guidance at 2.300-2.400 EPS. Equities analysts forecast that The Gap, Inc. will post 2.33 EPS for the current fiscal year.

GAP Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, October 28th. Investors of record on Wednesday, October 7th will be paid a $0.175 dividend. This represents a $0.70 dividend on an annualized basis and a yield of 3.3%. The ex-dividend date is Wednesday, October 7th. GAP's dividend payout ratio is 27.56%.

Hedge Funds Weigh In On GAP

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in GAP. BlackRock Inc. bought a new position in shares of GAP in the second quarter valued at about $428,824,000. California State Teachers Retirement System boosted its holdings in shares of GAP by 1,732.5% during the 2nd quarter. California State Teachers Retirement System now owns 5,116,415 shares of the company's stock worth $95,575,000 after buying an additional 4,837,214 shares during the period. Ameriprise Financial Inc. grew its stake in GAP by 4.1% in the 3rd quarter. Ameriprise Financial Inc. now owns 4,588,800 shares of the company's stock valued at $98,154,000 after buying an additional 180,991 shares during the last quarter. Geode Capital Management LLC grew its stake in GAP by 0.3% in the 4th quarter. Geode Capital Management LLC now owns 4,291,846 shares of the company's stock valued at $110,750,000 after buying an additional 14,141 shares during the last quarter. Finally, LSV Asset Management raised its holdings in GAP by 3.6% in the 4th quarter. LSV Asset Management now owns 3,462,702 shares of the company's stock valued at $88,645,000 after acquiring an additional 121,001 shares during the period. 58.81% of the stock is owned by institutional investors.

About GAP

Gap Inc is a global specialty retailer renowned for its portfolio of apparel and accessories brands, including Gap, Banana Republic, Old Navy and Athleta. The company designs, sources and markets clothing across a broad price range and style spectrum, catering to men, women and children. Its offerings extend from everyday wardrobe essentials such as denim, tees and outerwear to performance and lifestyle pieces, reflecting each brand's distinct identity and price point.

Founded in San Francisco in 1969 by Donald and Doris Fisher, Gap Inc has grown into one of the world's largest apparel companies.

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