Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
On Monday, JPMorgan analysts reaffirmed their Overweight rating on Gap, Inc. (NYSE: NYSE:GAP) stock, maintaining their price target at $29. The company, currently trading at a P/E ratio of 9.7x and generating $15.16B in revenue, appears undervalued according to InvestingPro analysis. This decision is based on the company’s financial projections and growth strategies.
JPMorgan’s evaluation relies on a linear regression analysis of Gap’s pre-pandemic growth trends. The analysts emphasize the company’s multi-year growth model, which forecasts a 3.5% increase in revenue and an EBIT margin rate between 8% and 10%. InvestingPro data shows Gap maintains strong financial health with an overall score of 3.07, labeled as "GREAT."
The analysis suggests that if Gap achieves its outlined growth objectives, it could reach an enterprise value to EBITDA multiple of approximately 6.5x. This would potentially raise the equity value to about $35, indicating a possible upside for the stock. Get access to 8 additional key InvestingPro Tips and comprehensive analysis through the Pro Research Report, available with an InvestingPro subscription.
Gap’s management strategy and financial targets are pivotal in this assessment. The company’s historical performance and future projections play a crucial role in JPMorgan’s continued confidence in the stock.
The reaffirmation of the Overweight rating and the stable price target reflect JPMorgan’s positive outlook on Gap’s ability to meet its growth targets in the coming years.
In other recent news, Gap Inc (BVMF:GPSI34). reported strong financial results for the first quarter of fiscal year 2025, surpassing earnings and revenue expectations. The company achieved earnings per share (EPS) of $0.51, exceeding the forecast of $0.44, and reported revenue of $3.46 billion, which was higher than the anticipated $3.41 billion. Despite these positive outcomes, Gap’s stock experienced a decline in after-hours trading. The company noted a 2% increase in net sales and a 140 basis point improvement in operating margin, reaching 7.5%. Old Navy and Gap brands showed robust performance, with Old Navy’s comparable sales rising by 3% and Gap’s by 5%. Citi analyst Paul Lejuez maintained a Buy rating on Gap’s stock but reduced the price target from $33.00 to $30.00, citing tariff impacts as a potential headwind. Gap Inc. reiterated its fiscal year 2025 guidance but acknowledged that tariffs could pose a $100-150 million challenge to the cost of goods sold in the second half of the year. The company continues to focus on brand reinvigoration and digital sales growth as part of its strategic initiatives.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.