Gap, Inc. (The) (GPS) Downgraded to Sell at Zacks Investment Research

Zacks Investment Research downgraded shares of Gap, Inc. (The) (NYSE:GPS) from a hold rating to a sell rating in a research note released on Tuesday morning.

According to Zacks, “Though Gap’s new growth strategy focused on growing its Old Navy and Athleta brands looks promising, results continue to be soft at its namesake and Banana Republic brands. Moreover, going forward it expects SG&A costs to increase at a higher rate than the first half. This mainly stems from increased product, marketing and digital investments for the significant back-to-school selling season. The company expects the rise in costs to hurt its bottom line. Additionally, the company expects currency headwinds to persist in fiscal 2017, which in turn might dent the quarterly results. Nonetheless, Gap’s shares have outpaced the industry in the last three months, driven by its solid focus on enhancing product quality and responsiveness to changing consumer trends. The company has been making constant efforts to boost its digital and mobile offerings, alongside improving product acceptance. Estimates have been going down lately.”

Several other equities research analysts have also issued reports on the company. Royal Bank Of Canada reaffirmed a hold rating and set a $26.00 price target on shares of Gap, Inc. (The) in a research note on Monday, September 18th. ValuEngine raised Gap, Inc. (The) from a hold rating to a buy rating in a research note on Thursday, September 7th. Citigroup Inc. raised Gap, Inc. (The) from a sell rating to a neutral rating and lifted their price target for the stock from $22.00 to $24.00 in a research note on Friday, September 1st. Oppenheimer Holdings, Inc. set a $33.00 price target on Gap, Inc. (The) and gave the stock a buy rating in a research note on Monday, October 30th. Finally, Jefferies Group LLC reiterated a buy rating and issued a $39.00 price objective (up previously from $35.00) on shares of Gap, Inc. (The) in a report on Thursday, September 7th. Four investment analysts have rated the stock with a sell rating, twenty-three have given a hold rating and seven have issued a buy rating to the company. Gap, Inc. (The) currently has an average rating of Hold and an average target price of $27.51.

Shares of Gap, Inc. (NYSE GPS) opened at $29.40 on Tuesday. The company has a debt-to-equity ratio of 0.42, a quick ratio of 0.92 and a current ratio of 1.77. Gap, Inc. has a 52 week low of $21.02 and a 52 week high of $30.14. The stock has a market capitalization of $10,880.00, a PE ratio of 13.04, a price-to-earnings-growth ratio of 1.62 and a beta of 0.86.

Gap, Inc. (The) (NYSE:GPS) last issued its quarterly earnings results on Thursday, November 16th. The apparel retailer reported $0.58 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.55 by $0.03. Gap, Inc. (The) had a return on equity of 28.50% and a net margin of 5.42%. The firm had revenue of $3.84 billion during the quarter, compared to analyst estimates of $3.76 billion. During the same quarter in the previous year, the company posted $0.60 earnings per share. The company’s revenue was up 1.1% compared to the same quarter last year. sell-side analysts forecast that Gap, Inc. will post 2.06 EPS for the current year.

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The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, January 31st. Investors of record on Wednesday, January 3rd will be given a $0.23 dividend. The ex-dividend date is Tuesday, January 2nd. This represents a $0.92 annualized dividend and a yield of 3.13%. Gap, Inc. (The)’s dividend payout ratio (DPR) is presently 43.81%.

In related news, EVP Paul Joseph Chapman sold 4,898 shares of the company’s stock in a transaction that occurred on Tuesday, August 22nd. The stock was sold at an average price of $22.82, for a total value of $111,772.36. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, CEO Sonia Syngal sold 1,935 shares of the company’s stock in a transaction that occurred on Thursday, September 7th. The shares were sold at an average price of $25.79, for a total value of $49,903.65. Following the completion of the transaction, the chief executive officer now directly owns 39,656 shares in the company, valued at $1,022,728.24. The disclosure for this sale can be found here. Insiders sold a total of 676,682 shares of company stock worth $18,906,180 over the last ninety days. 27.30% of the stock is currently owned by insiders.

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Commonwealth of Pennsylvania Public School Empls Retrmt SYS lifted its holdings in shares of Gap, Inc. (The) by 0.5% during the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 16,354 shares of the apparel retailer’s stock valued at $360,000 after buying an additional 80 shares during the period. Louisiana State Employees Retirement System lifted its holdings in shares of Gap, Inc. (The) by 1.5% during the 2nd quarter. Louisiana State Employees Retirement System now owns 13,700 shares of the apparel retailer’s stock valued at $301,000 after buying an additional 200 shares during the period. State Treasurer State of Michigan lifted its holdings in shares of Gap, Inc. (The) by 0.4% during the 2nd quarter. State Treasurer State of Michigan now owns 72,346 shares of the apparel retailer’s stock valued at $1,591,000 after buying an additional 300 shares during the period. State of Alaska Department of Revenue lifted its holdings in shares of Gap, Inc. (The) by 2.1% during the 2nd quarter. State of Alaska Department of Revenue now owns 18,320 shares of the apparel retailer’s stock valued at $402,000 after buying an additional 380 shares during the period. Finally, Morningstar Investment Services LLC lifted its holdings in shares of Gap, Inc. (The) by 2.0% during the 2nd quarter. Morningstar Investment Services LLC now owns 21,998 shares of the apparel retailer’s stock valued at $484,000 after buying an additional 424 shares during the period. 56.78% of the stock is currently owned by hedge funds and other institutional investors.

About Gap, Inc. (The)

The Gap, Inc (Gap Inc) is an apparel retail company. The Company offers apparel, accessories and personal care products for men, women and children under the Gap, Banana Republic, Old Navy, Athleta and Intermix brands. Its products are available to customers online through Company-owned Websites and through the use of third-parties that provide logistics and fulfillment services.

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