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Investing.com - BTIG initiated coverage on Gap, Inc. (NYSE:GAP) with a Buy rating and a $30.00 price target on Tuesday. The retailer, currently trading at $20.63 with a P/E ratio of 8.93, shows promising valuation metrics according to InvestingPro data.
The research firm established fiscal year 2025 earnings estimates of $2.10 per share and fiscal year 2026 estimates of $2.25 per share for the clothing retailer. With a gross profit margin of 41.09% and EBITDA of $1.7 billion in the last twelve months, Gap demonstrates solid financial fundamentals.
BTIG cited the increasing relevance of Gap’s brands as a key factor in its positive outlook for the company.
The firm also highlighted significant operating margin expansion potential, noting that Gap could achieve double-digit operating margins in the future, up from 7% this year.
Gap shares closed at $24.15 on Tuesday, leaving approximately 24% upside potential to BTIG’s price target.
In other recent news, Gap Inc. has announced a multi-year partnership with Google Cloud to integrate artificial intelligence across its retail operations for brands like Old Navy, Gap, Banana Republic, and Athleta. This collaboration aims to enhance product innovation, customer experience, and employee empowerment using technologies such as Gemini, Vertex AI, and BigQuery. Additionally, Gap Inc. is expanding into beauty and accessories, appointing industry veterans Deb Redmond and Michele Parsons as General Managers of Beauty and Accessories, respectively. The company has also engaged John Demsey and Reed Krakoff as Executive Directors to provide strategic guidance in this new venture.
In further developments, Gap Inc. has appointed Jody Gerson, CEO of Universal Music Publishing Group, to its Board of Directors. Analysts at Jefferies view Gap’s expansion into beauty and accessories as a strategic move that could drive growth. Meanwhile, Telsey Advisory Group has adjusted its price target for Gap Inc. to $24.00, citing tariff pressures as a significant factor impacting the retailer’s margins. These recent developments reflect Gap Inc.’s ongoing transformation and strategic initiatives.
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