It's Not Yet Time to Fall Into the Gap

I so want to go against the grain and call Gap (GPS Quote) a good contrarian play.

The retailer is hated on both Wall Street and Main Street. About the most positive thing analysts seem to be able to say about the company these days is that the merchandise in its Banana Republic chain is not hideous.

Nevertheless, overwhelming negative sentiment alone is not enough to zig when others zag and go long in the face of such pessimism. There needs to be a catalyst, something that can make investors believe that things are turning around, even if the rest of Wall Street doesn't acknowledge it yet.

Many investors are hoping that Gap's earnings release and conference call after the closing bell Thursday will offer some beacon of hope that such a turnaround is imminent. The company is expected to provide an update on its plans for its flailing Gap and Old Navy brands.

But don't hit the buy button just yet. It could be a while before Gap is pointed in the right direction.

Out of Fashion

While the company may detail turnaround efforts for its namesake brand, don't expect consumers to flock to Gap stores anytime soon. According to UBS analyst Meredith Love Kent, Gap's spring product line is not as stylish as competitors Abercrombie & Fitch (ANF Quote), American Eagle Outfitters (AEOS Quote) and J. Crew (JCG Quote).

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