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Investing.com - UBS lowered its price target on Gap, Inc. (NYSE:GAP) to $23.00 from $27.00 while maintaining a Neutral rating ahead of the retailer’s quarterly earnings report. The stock, currently trading at $21.20, maintains a relatively modest P/E ratio of 9.09x, according to InvestingPro data.
The firm’s analysis of industry data suggests Gap’s second-quarter and third-quarter-to-date sales trends were solid, potentially exceeding consensus expectations by approximately 100 basis points.
UBS forecasts Gap will report earnings per share of $0.57, slightly above the consensus estimate of $0.55, representing a potential 2 cent beat.
Despite the positive sales outlook, UBS cited uncertainty around how Gap will update its fiscal year 2025 gross margin guidance given the new US tariffs as a key reason for maintaining its neutral stance.
The options market implies Gap stock will move approximately 8.6% following its earnings report, compared to its historical average earnings day move of 6.7%, a view UBS agrees with.
In other recent news, Gap Inc (BVMF:GPSI34). announced a third-quarter fiscal year 2025 dividend of $0.165 per share, payable on or after October 29, 2025, to shareholders of record as of October 8, 2025. In leadership changes, Gap Inc. appointed Maggie Gauger as the new Global Brand President and CEO of Athleta, effective August 1. Gauger, a veteran from Nike (NYSE:NKE), brings over 20 years of leadership experience to the role. Analyst activity saw Barclays (LON:BARC) downgrade Gap’s stock from Overweight to Equalweight, reducing the price target from $24.00 to $19.00 due to anticipated margin contraction from tariff pressures. Conversely, TD Cowen adjusted its price target from $31.00 to $29.00 but maintained a Buy rating, citing potential growth for Gap and Old Navy brands. JPMorgan maintained an Overweight rating with a $29 price target, based on Gap’s financial projections and growth strategies. JPMorgan’s analysis highlights a projected 3.5% revenue increase and an EBIT margin rate between 8% and 10%. These developments reflect the company’s ongoing strategic adjustments and market evaluations.
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