GAP: Jefferies still a buyer, but cuts target
(CercleFinance.com) - Jefferies has reinstated its "buy" rating on Gap, albeit cutting its target price for the share from 48 dollars to 45 dollars, the day after the publication of Q1 results that were hit by heavy depreciation at the Gap brand.
The broker said that the weather has not helped, although the Gap brand is clearly a problem that needs to be addressed, explaining that even with margins that are already low, it is still weighing on the group's margins and overall results.
However, Jefferies considers that with Gap having a total market capitalisation of two billion dollars below that of its peer Lululemon, investors should buy the share on any decline in its price after Q1 results.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The broker said that the weather has not helped, although the Gap brand is clearly a problem that needs to be addressed, explaining that even with margins that are already low, it is still weighing on the group's margins and overall results.
However, Jefferies considers that with Gap having a total market capitalisation of two billion dollars below that of its peer Lululemon, investors should buy the share on any decline in its price after Q1 results.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.